Enhanced Bonus Program, Other Elements in Place to Boost Results
CHESTERFIELD, Mo., Aug. 7 /PRNewswire-FirstCall/ -- Reliv
International, Inc. (Nasdaq: RELV), a developer, manufacturer and marketer
of a proprietary line of nutritional supplements addressing basic
nutrition, wellness needs, weight management and sports nutrition, today
reported lower net sales and net income for the second quarter of 2006
compared to the same period last year.
For the second quarter, net sales were $27.8 million, down 2.4 percent
from $28.5 million in the second quarter of 2005. Net income was $1.62
million, down 18 percent from $1.98 million in the same quarter of last
year. Diluted earnings per share were $0.09 compared to $0.12 diluted
earnings per share in the year-ago quarter.
For the first half of 2006, sales were $59.0 million, up from $57.5
million during the same period last year. Net income was $4.07 million in
the first half of 2006 compared to $4.04 million in the same period in
2005. Earnings per share rose $0.01 to $0.25 a share for the first half of
2006.
Reliv reported sales outside the United States rose 13 percent to $2.8
million for the second quarter, with sales increases recorded in most of
the company's seven international markets. The strongest increases were
reported in Australia/New Zealand, which was up 14 percent, and the United
Kingdom, up 36 percent versus the second quarter of 2005. This increase
reverses a downward slide in sales in non-U.S. markets that began last
year.
"About two years ago we made a conscious decision to invest more
resources, both senior management time and new personnel, in our
international operations. We said we would straighten out those operations,
and the second- quarter international sales increase is evidence that we
are beginning to move in the right direction," said Robert L. Montgomery,
president, chairman and CEO of Reliv.
"We were disappointed with our U.S. results as compared to last year.
But with extra international resources in place, senior management can now
return our full focus to our overall operations, and we believe we can
achieve positive sales and earnings growth," he added.
"My confidence is based on two key factors: One, we offer distributors
an outstanding business opportunity supported by a well defined,
disciplined system proven to help our distributors expand their businesses.
Two, we make nutrition simple with products that are effective, easy to use
and affordable," Montgomery said.
To boost sales, Reliv announced a special "Mega Bonus" program at its
2006 international conference in St. Louis last week, attended by nearly
6,000 distributors. "We will hand out more than $700,000 in new bonuses at
Reliv's international conference in St. Louis in August 2007," Montgomery
said. "The money will be divided among the top 50 distributors in group
sales volume between Aug. 1, 2006, and July 31, 2007, with the first-place
winner receiving $100,000." Combining the Mega Bonus funds with Reliv's
existing monthly bonuses will bring total distributor bonuses for the next
12 months to more than $1 million.
Reliv will host an investor conference call to discuss the second
quarter 2006 earnings with investors at 1:00 p.m. Eastern Time on August 7,
2006. The dial-in number for investors is 800-540-0559. The conference
identification is RELIV. To register, please call in 15 minutes prior to
start of the call. A replay of this call will be available for one week by
telephone from 3:00 p.m. Eastern by calling 800-839-5131 and using the same
conference identification RELIV. A live Web cast of this call will be
available through the Investor Relations section of Reliv's Web site,
http://www.reliv.com/us/investor . An online archive of the broadcast will
be available on Reliv's Web site in the Investor Relations section 24 hours
after the call concludes.
Reliv International, Inc., based in suburban St. Louis, Mo., develops,
manufactures and markets a proprietary line of nutritional supplements
addressing basic nutrition, specific wellness needs, weight management and
sports nutrition. Reliv sells its products through an international network
marketing system of approximately 65,000 independent distributors. Reliv
International's common stock trades on The Nasdaq Stock Market(R) under the
symbol RELV. Additional information about Reliv International, Inc. can be
obtained on the Web at http://www.reliv.com .
Statements made in this release that are not historical facts are
"forward-looking" statements (as defined in the Private Securities
Litigation Reform Act of 1995) that involve risks and uncertainties and are
subject to change at any time. These forward-looking statements may
include, but are not limited to, statements containing words such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential," "continue," or similar expressions.
Factors that could cause actual results to differ are identified in the
public filings made by Reliv with the Securities and Exchange Commission.
More information on factors that could affect Reliv's business and
financial results are included in its public filings made with the
Securities and Exchange Commission, including its Annual Report on Form
10-K and Quarterly Reports on Form 10-Q, copies of which are available on
the Reliv's web site, http://www.reliv.com .
Condensed Consolidated Balance Sheets
June 30 December 31
2006 2005
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $12,370,206 $5,653,594
Short-term investments 5,000,000 -
Accounts and notes receivable, less
allowances of $7,200 in 2006 and
$39,700 in 2005 681,343 775,623
Accounts due from employees and
distributors 215,025 152,760
Inventories
Finished goods 2,881,756 3,569,449
Raw materials 1,129,894 1,441,107
Sales aids and promotional materials 727,756 573,900
Total inventories 4,739,406 5,584,456
Refundable income taxes 847,542 -
Prepaid expenses and other current
assets 1,988,917 1,240,138
Deferred income taxes 414,430 452,430
Total current assets 26,256,869 13,859,001
Other assets 2,858,919 1,626,330
Accounts due from employees and
distributors 280,418 355,651
Net property, plant and equipment 9,851,399 10,140,441
Total Assets $39,247,605 $25,981,423
Liabilities and Stockholders' Equity
Total current liabilities $10,257,667 $9,895,260
Total non-current liabilities 1,224,866 3,521,335
Stockholders' equity 27,765,072 12,564,828
Total Liabilities and Stockholders'
Equity $39,247,605 $25,981,423
Consolidated Statements of Income
Three months ended June 30 Six months ended June 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product sales $24,990,986 $25,644,506 $53,032,320 $51,758,999
Handling & freight
income 2,858,082 2,901,580 6,012,100 5,766,183
Net Sales 27,849,068 28,546,086 59,044,420 57,525,182
Costs and expenses:
Cost of products
sold 4,722,823 4,711,472 9,805,004 9,654,776
Distributor
royalties and
commissions 11,156,285 11,379,011 23,783,317 23,090,727
Selling, general and
administrative 9,484,876 9,190,021 18,951,617 18,153,307
Total Costs and
Expenses 25,363,984 25,280,504 52,539,938 50,898,810
Income from operations 2,485,084 3,265,582 6,504,482 6,626,372
Other income
(expense):
Interest income 197,446 79,513 282,122 149,536
Interest expense (11,026) (117,177) (45,467) (202,667)
Other income 37,883 45,856 98,519 48,922
Income before income
taxes 2,709,387 3,273,774 6,839,656 6,622,163
Provision for income
taxes 1,089,000 1,295,000 2,769,000 2,580,000
Net Income $1,620,387 $1,978,774 $4,070,656 $4,042,163
Earnings per common
share - Basic $0.10 $0.12 $0.25 $0.25
Weighted average
shares 16,667,000 16,096,000 16,121,000 16,216,000
Earnings per common
share - Diluted $0.09 $0.12 $0.25 $0.24
Weighted average
shares 17,106,000 16,622,000 16,554,000 16,825,000
Cash dividends
declared per common
share $0.050 $0.035 $0.050 $0.035
Net sales by Market
(in thousands)
Three months ended June 30,
2006 2005 Change From
% of % of Prior Year
$ sales $ sales Amount %
United States 25,061 90.0% 26,088 91.4% (1,027) -3.9%
Australia/New Zealand 576 2.1% 505 1.8% 71 14.1%
Canada 412 1.5% 456 1.6% (44) -9.6%
Mexico 314 1.1% 293 1.0% 21 7.2%
United Kingdom/Ireland 319 1.1% 235 0.8% 84 35.7%
Philippines 514 1.9% 479 1.7% 35 7.3%
Malaysia/Singapore 457 1.6% 490 1.7% (33) -6.7%
Germany 196 0.7% - - 196 -
Consolidated Total 27,849 100.0% 28,546 100.0% (697) -2.4%
Net sales by Market
(in thousands)
Six months ended June 30,
2006 2005 Change From
% of % of Prior Year
$ sales $ sales Amount %
United States 53,592 90.8% 52,057 90.5% 1,535 2.9%
Australia/New Zealand 1,155 2.0% 1,081 1.9% 74 6.8%
Canada 820 1.4% 907 1.6% (87) -9.6%
Mexico 643 1.1% 835 1.5% (192) -23.0%
United Kingdom/Ireland 592 1.0% 402 0.7% 190 47.3%
Philippines 1,007 1.7% 1,280 2.2% (273) -21.3%
Malaysia/Singapore 915 1.5% 963 1.7% (48) -5.0%
Germany 320 0.5% - - 320 -
Consolidated Total 59,044 100.0% 57,525 100.0% 1,519 2.6%
The following table sets forth, as of June 30, 2006 and 2005, the number
of our active distributors and Master Affiliates and above.
The total number of active distributors includes Master Affiliates and
above. We define an active distributor as one that enrolls as a
distributor or renews its distributorship during the prior twelve months.
Master Affiliates and above are distributors that have attained
the highest level of discount and are eligible for royalties generated by
Master Affiliates and above in their downline organization.
Growth in the number of active distributors and Master Affiliates and
above is a key factor in continuing the growth of our business.
Active Distributors and Master Affiliates and above by Market
As of 6/30/2006 As of 6/30/2005 Change in %
Master Master Master
Active Affiliates Active Affiliates Active Affiliates
Distri- and Distri- and Distri- and
butors Above butors Above butors Above
United States 52,270 14,160 50,240 13,090 4.0% 8.2%
Australia/
New Zealand 2,380 210 2,790 240 -14.7% -12.5%
Canada 1,150 160 1,370 190 -16.1% -15.8%
Mexico 1,180 200 5,880 420 -79.9% -52.4%
United Kingdom/
Ireland 870 140 530 60 64.2% 133.3%
Philippines 3,320 300 5,640 500 -41.1% -40.0%
Malaysia/Singapore 3,020 400 3,780 680 -20.1% -41.2%
Germany 260 90 - - - -
Consolidated total 64,450 15,660 70,230 15,180 -8.2% 3.2%
SOURCE Reliv International, Inc.
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http://www.prnewswire.com/comp/103123.html / (RELV)
CONTACT:
Steven D. Albright, Chief Financial Officer,
+1-636-733-1305, or Investor Relations, Fred A. Nielson,
+1-636-733-1314, both of Reliv International; or Al Palombo of
Cameron Associates, +1-212-554-5488
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