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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Natural Health Trends Corporation | NASDAQ:NHTC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.08 | -1.13% | 7.00 | 6.94 | 7.36 | 7.10 | 7.00 | 7.00 | 13,030 | 21:00:10 |
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☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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59-2705336
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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NHTC
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The NASDAQ Stock Market LLC
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Large accelerated filer
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☐
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Accelerated filer
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☑
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Non-accelerated filer
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☐
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Smaller reporting company
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☑
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Emerging growth company
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☐
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Page
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Product Category
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Description
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Products
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Wellness
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Products formulated and designed to meet specific wellness goals of our customers. Includes targeted nutrition for joint health, antioxidant support, digestive health, heart health, vision health, immune support and cellular health.
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Liquid, encapsulated, tableted and powder dietary and nutritional supplements, vitamins, minerals
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Premium Noni Juice, Triotein™, Cluster X2™, Children’s Chewable Multivitamin, ReStor Silver™, ReStor Vital™, HerBalance, Trifusion Max™, Glucosamine 2200™, FibeRich™, Energin, Enhanced Essential Probiotics, Omega-3 Essential Fatty Acids, MemoryBurst™, StemRenu®, OcuFocus™, CurcuMore™, AdaptoGin™
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Herbal
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Products formulated incorporating ingredients commonly found in traditional Chinese medicine.
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Herbal supplements
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LivaPro™, Cordyceps Mycelia CS-4™, Purus, CogniMax, RespFactor™
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Beauty
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Products to help improve skin health and bring an appearance of youthful vibrancy. This product line includes age-defying and hydrating cleansers, creams, lotions, serums and toners to moisturize, protect and improve the appearance of skin.
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Facial skin care and hand and body care
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Skindulgence™ 30 Minute Firming System, Time Restore™ Eye Cream and Essence, BioCell SC Mask, 24K Renaissance™ Rejuvenation Serum, Valesce™, Floraeda Hydrating Series, Botanical Hand Protector™, Airelle® Exfoliating Cleanser, Airelle® Age-Defying Facial Serum, Airelle® Intense Hydrating Repair Complex, Airelle® Age-Defying Eye & Lip Treatment, Airelle® Hydrating Manuka Mask, Color Awakening Lipstick™, Adamas™ Brightening Series, Moisturizing Cleansing Gel
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Lifestyle
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Products uniquely formulated to improve overall quality of life and to support active, physical and healthy lifestyles including weight management, and energy enhancing supplements.
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Supplements and topical gels for improved vitality
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Alura Lux™ by NHT Global, Valura Lux™, LaVie™, TwinSlim Diet Jelly™, NaturalGlo™
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Home
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Products designed to create a clean and natural living environment for the home.
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Home appliances
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Air Purifier
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Baby
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Products uniquely formulated with gentle ingredients from nature for infants and babies.
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Infant and toddler bath and body care
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Moisturizing Lotion and Bubble Cleanser
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Active
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Products uniquely formulated to support those with active, healthy lifestyles. Products include dietary supplements to enhance daily nutrition for lasting energy.
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Dietary supplement drink mixes for nutritional support and refuel and recovery support
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Phyto Daily Active™ and Optimal Recovery™
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Daily
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Daily care products designed to cleanse and protect the body and promote personal hygiene.
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Oral care, hair care, and body care
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FE Enzyme Toothpaste™, Bontanesse™ Series, Smart Sonic Toothbrush
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•
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Our field leaders are experienced and culturally coherent. They work effectively with our management, implementing our strategies and providing continuous feedback to improve our services.
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•
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A discipline and capability has been established to continue launching high-quality consumer products that are designed to facilitate the accomplishment of our corporate objectives.
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•
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We have developed and rolled out a comprehensive training system that provides a complete career path appropriate for our members. Our training material covers the needs of our members, be they prospects, new recruits, product evangelists, sales leaders or dream builders.
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•
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We have developed a year-round, multi-faceted promotional plan that targets different segments of our membership and has proven effective in the last few years.
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•
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We have implemented a commission structure that makes it as easy as possible to join our business, while giving existing members a chance to start earning money as quickly as possible in multiple ways.
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•
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The continuously improving mentality and methodology in our customer services have not only distinguished us as an organization, but have also given us a constant flow of information as to how we can do better to service our members.
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•
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Through commissions paid on the accumulated bonus volume from product purchases made by their down-line members and customers; and
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•
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Through retail profits on sales of products purchased by members at discount and wholesale prices and resold at retail prices (for purchasers in some of our smaller markets and purchasers from our China subsidiary, sales are for personal consumption only and income may not be earned through retail profits).
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•
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Teleconferences – we hold teleconferences with associate field leadership on various subjects such as technical product discussions, member organization building and management techniques.
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•
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Internet – we maintain a website at www.nhtglobal.com. On this website, the user can read company news, learn more about various products, sign up to be a member, place orders, and track the fulfillment and delivery of their orders.
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•
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Product Tools – we offer a variety of marketing tools to members, including product catalogs, videos, informational brochures, pamphlets and posters for individual products, which are both printed and available online.
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•
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Broadcast E-mail and Text Messages – we send announcements via e-mail and/or text messages to members who opt in to receive this form of communication.
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•
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Social Media Tools – in some countries we maintain country-specific social media sites to foster a community environment around our product offering and business opportunity.
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•
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impose cancellation/product return, inventory buy-backs and cooling-off rights for consumers and members;
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•
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require us or our members to obtain a license from, or register with, governmental agencies;
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•
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impose reporting requirements; and
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•
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impose upon us requirements, such as requiring members to maintain levels of retail sales to qualify to receive commissions, to avoid pyramid schemes by ensuring that members are being compensated for sales of products and not for recruiting new members.
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•
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adverse publicity or negative perceptions regarding us, our products, our method of distribution or our competitors;
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•
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lack of interest in, or the technical failure of, existing or new products;
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•
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lack of interest in our existing compensation plan for members or in enhancements or other changes to that compensation plan;
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•
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our actions to enforce our policies and procedures;
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•
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regulatory actions or charges or private actions against us or others in our industry, such as the 100-day campaign initiated in China in January 2019 (as well as its extension and aftermath, including the related look-back review);
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•
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general economic, business and political conditions, including the recent political unrest in Hong Kong;
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•
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changes in management or the loss of one or more key member leaders;
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•
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entry of new competitors, or new products or compensation plan enhancements by existing competitors, in our markets; and
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•
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potential saturation or maturity levels in a given country or market which could negatively impact our ability to attract and retain members in such market.
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•
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active participation of speculative traders in our stock (including short sellers);
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•
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market rumors regarding our business operations;
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•
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government scrutiny of our business;
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•
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adverse publicity related to our business or industry; and
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•
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fluctuations in our operating results.
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Period
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Total Number of Shares Purchased (a)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)
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Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (c)
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||||||
October 1-31, 2019
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—
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$
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—
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—
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$
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26,762
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November 1-30, 2019
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—
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$
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—
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—
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$
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26,762
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December 1-31, 2019
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97,785
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$
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5.64
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97,785
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$
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26,210
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(a)
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The shares were purchased in open market transactions.
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(b)
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On January 12, 2016, the Board of Directors authorized an increase to our stock repurchase program first approved on July 28, 2015 from $15.0 million to $70.0 million. Repurchases are expected to be executed to the extent that our earnings and cash-on-hand allow, and will be made in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act. For all or a portion of the authorized repurchase amount, we may enter into one or more plans that are compliant with Rule 10b5-1 of the Exchange Act that are designed to facilitate these purchases. The stock repurchase program does not require us to acquire a specific number of shares, and may be suspended from time to time or discontinued. During December 2019, the Company purchased a total of 97,785 shares of common stock for an aggregate purchase price of $552,000, plus transaction costs.
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(c)
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As of December 31, 2019, $26.2 million of the $70.0 million stock repurchase program first approved on July 28, 2015 and increased on January 12, 2016 remained available for future purchases. The after-tax equivalent remaining available is $21.9 million (see Note 9 to the consolidated financial statements).
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•
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through commissions paid on the accumulated bonus volume from product purchases made by their down-line members and customers; and
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•
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through retail profits on sales of products purchased by members at wholesale prices and resold at retail prices (for purchasers in some of our smaller markets and purchasers from our China subsidiary, sales are for personal consumption only and income may not be earned through retail profits).
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Year Ended December 31,
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2019
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2018
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Net sales
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100.0
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%
|
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100.0
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%
|
Cost of sales
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25.9
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20.5
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Gross profit
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74.1
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79.5
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Operating expenses:
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Commissions expense
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45.8
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45.6
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Selling, general and administrative expenses
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35.1
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|
|
16.3
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Goodwill impairment
|
2.3
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—
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Total operating expenses
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83.2
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|
|
61.9
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Income (loss) from operations
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(9.1
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)
|
|
17.6
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Other income, net
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1.8
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|
|
0.4
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Income (loss) before income taxes
|
(7.3
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)
|
|
18.0
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Income tax provision
|
—
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|
|
1.8
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Net income (loss)
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(7.3
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)%
|
|
16.2
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%
|
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Year Ended December 31,
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||||||||||||
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2019
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2018
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||||||||||
Americas1
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$
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5,431
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7.0
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%
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$
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6,982
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3.6
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%
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Hong Kong2
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62,724
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80.8
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169,452
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88.3
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China
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2,941
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3.8
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|
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7,744
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4.0
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Taiwan
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3,126
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4.0
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3,964
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|
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2.1
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South Korea
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368
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|
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0.5
|
|
|
493
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|
|
0.3
|
|
||
Japan
|
180
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|
|
0.2
|
|
|
204
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|
|
0.1
|
|
||
Singapore
|
72
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|
|
0.1
|
|
|
169
|
|
|
0.1
|
|
||
Malaysia
|
220
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|
|
0.3
|
|
|
390
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|
|
0.2
|
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Russia and Kazakhstan
|
980
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|
|
1.2
|
|
|
868
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|
|
0.4
|
|
||
Europe
|
1,370
|
|
|
1.8
|
|
|
1,644
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|
|
0.9
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|
||
India
|
202
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|
|
0.3
|
|
|
—
|
|
|
—
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|
||
Total
|
$
|
77,614
|
|
|
100.0
|
%
|
|
$
|
191,910
|
|
|
100.0
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%
|
Declaration Date
|
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Per Share
|
|
Amount
|
|
Record Date
|
|
Payment Date
|
||||
October 29, 2019 (special)
|
|
$
|
0.40
|
|
|
$
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4,608
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|
|
November 19, 2019
|
|
November 29, 2019
|
January 27, 2019 (special)
|
|
0.08
|
|
|
912
|
|
|
March 5, 2019
|
|
March 15, 2019
|
||
January 27, 2019
|
|
0.16
|
|
|
1,824
|
|
|
March 5, 2019
|
|
March 15, 2019
|
||
|
|
$
|
0.64
|
|
|
$
|
7,344
|
|
|
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|
|
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2019
|
|
2018
|
||||||||||||||||||||||||||||
|
4th
Quarter
|
|
3rd
Quarter
|
|
2nd
Quarter
|
|
1st
Quarter
|
|
4th
Quarter |
|
3rd
Quarter |
|
2nd
Quarter |
|
1st
Quarter |
||||||||||||||||
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||||||||||||||||
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(In Thousands, Except Per Share Data)
|
||||||||||||||||||||||||||||||
Net sales
|
$
|
17,835
|
|
|
$
|
17,023
|
|
|
$
|
23,428
|
|
|
$
|
19,328
|
|
|
$
|
41,590
|
|
|
$
|
47,043
|
|
|
$
|
50,910
|
|
|
$
|
52,367
|
|
Gross profit
|
12,733
|
|
|
12,652
|
|
|
18,021
|
|
|
14,104
|
|
|
32,769
|
|
|
37,117
|
|
|
40,511
|
|
|
42,146
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|
||||||||
Income (loss) from operations
|
(3,246
|
)
|
|
(1,064
|
)
|
|
(4
|
)
|
|
(2,709
|
)
|
|
5,733
|
|
|
7,847
|
|
|
10,108
|
|
|
10,044
|
|
||||||||
Net income (loss)
|
(2,842
|
)
|
|
(1,243
|
)
|
|
397
|
|
|
(1,923
|
)
|
|
5,559
|
|
|
7,629
|
|
|
9,023
|
|
|
8,824
|
|
||||||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
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(0.27
|
)
|
|
(0.12
|
)
|
|
0.04
|
|
|
(0.17
|
)
|
|
0.49
|
|
|
0.67
|
|
|
0.80
|
|
|
0.78
|
|
||||||||
Diluted
|
(0.27
|
)
|
|
(0.12
|
)
|
|
0.04
|
|
|
(0.17
|
)
|
|
0.49
|
|
|
0.67
|
|
|
0.80
|
|
|
0.78
|
|
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Page
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December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
96,035
|
|
|
$
|
132,653
|
|
Inventories
|
6,404
|
|
|
12,165
|
|
||
Other current assets
|
5,936
|
|
|
5,369
|
|
||
Total current assets
|
108,375
|
|
|
150,187
|
|
||
Property and equipment, net
|
735
|
|
|
934
|
|
||
Operating lease right-of-use assets
|
3,135
|
|
|
—
|
|
||
Goodwill
|
—
|
|
|
1,764
|
|
||
Restricted cash
|
3,390
|
|
|
2,998
|
|
||
Deferred tax asset
|
2,039
|
|
|
1,207
|
|
||
Other assets
|
823
|
|
|
831
|
|
||
Total assets
|
$
|
118,497
|
|
|
$
|
157,921
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
680
|
|
|
$
|
1,631
|
|
Accrued commissions
|
2,931
|
|
|
12,502
|
|
||
Other accrued expenses
|
2,387
|
|
|
6,121
|
|
||
Deferred revenue
|
4,506
|
|
|
6,795
|
|
||
Amounts held in eWallets
|
12,938
|
|
|
14,611
|
|
||
Operating lease liabilities
|
1,655
|
|
|
—
|
|
||
Other current liabilities
|
1,205
|
|
|
1,424
|
|
||
Total current liabilities
|
26,302
|
|
|
43,084
|
|
||
Income taxes payable
|
15,365
|
|
|
16,982
|
|
||
Deferred tax liability
|
202
|
|
|
186
|
|
||
Long-term incentive
|
—
|
|
|
7,808
|
|
||
Operating lease liabilities
|
1,564
|
|
|
—
|
|
||
Total liabilities
|
43,433
|
|
|
68,060
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 50,000,000 shares authorized; 12,979,414 shares issued at December 31, 2019 and 2018
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
86,102
|
|
|
86,415
|
|
||
Retained earnings
|
16,117
|
|
|
44,431
|
|
||
Accumulated other comprehensive loss
|
(1,264
|
)
|
|
(1,250
|
)
|
||
Treasury stock, at cost; 1,556,875 and 1,603,322 shares at December 31, 2019 and 2018, respectively
|
(25,904
|
)
|
|
(39,748
|
)
|
||
Total stockholders’ equity
|
75,064
|
|
|
89,861
|
|
||
Total liabilities and stockholders’ equity
|
$
|
118,497
|
|
|
$
|
157,921
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
77,614
|
|
|
$
|
191,910
|
|
Cost of sales
|
20,104
|
|
|
39,367
|
|
||
Gross profit
|
57,510
|
|
|
152,543
|
|
||
Operating expenses:
|
|
|
|
||||
Commissions expense
|
35,549
|
|
|
87,502
|
|
||
Selling, general and administrative expenses
|
27,220
|
|
|
31,309
|
|
||
Goodwill impairment
|
1,764
|
|
|
—
|
|
||
Total operating expenses
|
64,533
|
|
|
118,811
|
|
||
Income (loss) from operations
|
(7,023
|
)
|
|
33,732
|
|
||
Other income, net
|
1,426
|
|
|
789
|
|
||
Income (loss) before income taxes
|
(5,597
|
)
|
|
34,521
|
|
||
Income tax provision
|
14
|
|
|
3,486
|
|
||
Net income (loss)
|
$
|
(5,611
|
)
|
|
$
|
31,035
|
|
Net income (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
(0.52
|
)
|
|
$
|
2.75
|
|
Diluted
|
$
|
(0.52
|
)
|
|
$
|
2.74
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
||||
Basic
|
10,871
|
|
|
11,304
|
|
||
Diluted
|
10,871
|
|
|
11,318
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
(5,611
|
)
|
|
$
|
31,035
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
(28
|
)
|
|
(831
|
)
|
||
Unrealized gains (losses) on available-for-sale securities
|
14
|
|
|
(6
|
)
|
||
Comprehensive income (loss)
|
$
|
(5,625
|
)
|
|
$
|
30,198
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury Stock
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||||||||
BALANCE, December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,683
|
|
|
$
|
44,908
|
|
|
$
|
(413
|
)
|
|
(1,637,524
|
)
|
|
$
|
(40,570
|
)
|
|
$
|
90,621
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,035
|
|
|||||||
Common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
34,202
|
|
|
822
|
|
|
554
|
|
|||||||
Dividends declared, $2.77/share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,512
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,512
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(831
|
)
|
|
—
|
|
|
—
|
|
|
(831
|
)
|
|||||||
Unrealized losses on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
BALANCE, December 31, 2018
|
—
|
|
|
—
|
|
|
12,979,414
|
|
|
13
|
|
|
86,415
|
|
|
44,431
|
|
|
(1,250
|
)
|
|
(1,603,322
|
)
|
|
(39,748
|
)
|
|
89,861
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,611
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,611
|
)
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,093,641
|
)
|
|
(10,117
|
)
|
|
(10,117
|
)
|
|||||||
Common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(313
|
)
|
|
(15,359
|
)
|
|
—
|
|
|
1,140,088
|
|
|
23,961
|
|
|
8,289
|
|
|||||||
Dividends declared, $0.64/share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,344
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,344
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|||||||
Unrealized gains on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||||
BALANCE, December 31, 2019
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,102
|
|
|
$
|
16,117
|
|
|
$
|
(1,264
|
)
|
|
(1,556,875
|
)
|
|
$
|
(25,904
|
)
|
|
$
|
75,064
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
(5,611
|
)
|
|
$
|
31,035
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
387
|
|
|
424
|
|
||
Noncash lease expense
|
1,760
|
|
|
—
|
|
||
Deferred income taxes
|
(820
|
)
|
|
358
|
|
||
Goodwill impairment
|
1,764
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Inventories
|
5,820
|
|
|
(3,879
|
)
|
||
Other current assets
|
(554
|
)
|
|
2,065
|
|
||
Other assets
|
—
|
|
|
(55
|
)
|
||
Accounts payable
|
(953
|
)
|
|
(116
|
)
|
||
Accrued commissions
|
(9,598
|
)
|
|
1,410
|
|
||
Other accrued expenses
|
(2,797
|
)
|
|
(883
|
)
|
||
Deferred revenue
|
(2,315
|
)
|
|
2,359
|
|
||
Amounts held in eWallets
|
(1,742
|
)
|
|
(509
|
)
|
||
Operating lease liabilities
|
(1,807
|
)
|
|
—
|
|
||
Income taxes payable
|
(1,617
|
)
|
|
(2,077
|
)
|
||
Other current liabilities
|
(222
|
)
|
|
(326
|
)
|
||
Long-term incentive
|
(333
|
)
|
|
(96
|
)
|
||
Net cash provided by (used in) operating activities
|
(18,638
|
)
|
|
29,710
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(189
|
)
|
|
(214
|
)
|
||
Net cash used in investing activities
|
(189
|
)
|
|
(214
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Repurchase of common stock
|
(10,117
|
)
|
|
—
|
|
||
Dividends paid
|
(7,344
|
)
|
|
(31,512
|
)
|
||
Net cash used in financing activities
|
(17,461
|
)
|
|
(31,512
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
62
|
|
|
(811
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(36,226
|
)
|
|
(2,827
|
)
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period
|
135,651
|
|
|
138,478
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period
|
$
|
99,425
|
|
|
$
|
135,651
|
|
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
1,985
|
|
|
$
|
3,130
|
|
Issuance of treasury stock for employee awards, net
|
$
|
8,289
|
|
|
$
|
554
|
|
Right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
5,082
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Loss
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
Basic net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) available to common stockholders
|
$
|
(5,611
|
)
|
|
10,871
|
|
|
$
|
(0.52
|
)
|
|
$
|
31,035
|
|
|
11,304
|
|
|
$
|
2.75
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-vested restricted stock
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
14
|
|
|
|
|
||||
Diluted net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) available to common stockholders plus assumed conversions
|
$
|
(5,611
|
)
|
|
10,871
|
|
|
$
|
(0.52
|
)
|
|
$
|
31,035
|
|
|
11,318
|
|
|
$
|
2.74
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents:
|
|
|
|
||||
Cash
|
$
|
13,720
|
|
|
$
|
47,323
|
|
Cash equivalents
|
82,315
|
|
|
85,330
|
|
||
|
96,035
|
|
|
132,653
|
|
||
Restricted cash
|
3,390
|
|
|
2,998
|
|
||
|
$
|
99,425
|
|
|
$
|
135,651
|
|
|
|
|
|
||||
Inventories:
|
|
|
|
||||
Finished goods
|
$
|
6,142
|
|
|
$
|
11,171
|
|
Raw materials
|
1,249
|
|
|
1,145
|
|
||
Reserve for obsolescence
|
(987
|
)
|
|
(151
|
)
|
||
|
$
|
6,404
|
|
|
$
|
12,165
|
|
Property and equipment:
|
|
|
|
||||
Office equipment
|
$
|
578
|
|
|
$
|
537
|
|
Office software
|
1,037
|
|
|
918
|
|
||
Machinery
|
28
|
|
|
29
|
|
||
Furniture and fixtures
|
327
|
|
|
319
|
|
||
Leasehold improvements
|
1,001
|
|
|
1,022
|
|
||
Construction in progress (including internal-use software development costs)
|
—
|
|
|
19
|
|
||
Property and equipment, at cost
|
2,971
|
|
|
2,844
|
|
||
Accumulated depreciation and amortization
|
(2,236
|
)
|
|
(1,910
|
)
|
||
|
$
|
735
|
|
|
$
|
934
|
|
Other accrued expenses:
|
|
|
|
||||
Sales returns
|
$
|
373
|
|
|
$
|
801
|
|
Employee-related expense
|
1,258
|
|
|
4,051
|
|
||
Warehousing, inventory-related and other
|
756
|
|
|
1,269
|
|
||
|
$
|
2,387
|
|
|
$
|
6,121
|
|
Deferred revenue:
|
|
|
|
|
|
||
Unshipped product
|
$
|
2,390
|
|
|
$
|
4,574
|
|
Auto ship advances
|
1,985
|
|
|
1,876
|
|
||
Other
|
131
|
|
|
345
|
|
||
|
$
|
4,506
|
|
|
$
|
6,795
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Fair Value Level1
|
Adjusted Cost
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Adjusted Cost
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||
Money market funds
|
Level 1
|
$
|
11,659
|
|
|
$
|
—
|
|
|
$
|
11,659
|
|
|
$
|
3,281
|
|
|
$
|
—
|
|
|
$
|
3,281
|
|
Time deposits
|
Level 2
|
13,544
|
|
|
—
|
|
|
13,544
|
|
|
18,071
|
|
|
—
|
|
|
18,071
|
|
||||||
Municipal debt securities
|
Level 2
|
347
|
|
|
—
|
|
|
347
|
|
|
12,149
|
|
|
(7
|
)
|
|
12,142
|
|
||||||
Corporate debt securities
|
Level 2
|
56,784
|
|
|
(19
|
)
|
|
56,765
|
|
|
51,862
|
|
|
(26
|
)
|
|
51,836
|
|
||||||
Total investments
|
|
$
|
82,334
|
|
|
$
|
(19
|
)
|
|
$
|
82,315
|
|
|
$
|
85,363
|
|
|
$
|
(33
|
)
|
|
$
|
85,330
|
|
|
Operating leases
|
$
|
2,024
|
|
Short-term leases
|
284
|
|
|
Total lease cost
|
$
|
2,308
|
|
Weighted-average remaining lease term (in years)
|
3.1
|
|
Weighted-average discount rate
|
5.5
|
%
|
2020
|
$
|
1,734
|
|
2021
|
739
|
|
|
2022
|
429
|
|
|
2023
|
246
|
|
|
2024
|
227
|
|
|
Thereafter
|
173
|
|
|
Total lease payments
|
$
|
3,548
|
|
Less: imputed interest
|
(329
|
)
|
|
Present value of lease liabilities
|
$
|
3,219
|
|
2019
|
$
|
1,796
|
|
2020
|
1,340
|
|
|
2021
|
452
|
|
|
2022
|
332
|
|
|
2023
|
208
|
|
|
Thereafter
|
327
|
|
|
Total minimum lease obligations
|
$
|
4,455
|
|
|
December 31, 2017
|
|
Impairment Losses
|
|
December 31, 2018
|
|
Impairment Losses
|
|
December 31, 2019
|
||||||||||
Goodwill
|
$
|
14,145
|
|
|
$
|
—
|
|
|
$
|
14,145
|
|
|
$
|
—
|
|
|
$
|
14,145
|
|
Accumulated impairment losses
|
(12,381
|
)
|
|
—
|
|
|
(12,381
|
)
|
|
(1,764
|
)
|
|
(14,145
|
)
|
|||||
|
$
|
1,764
|
|
|
$
|
—
|
|
|
$
|
1,764
|
|
|
$
|
(1,764
|
)
|
|
$
|
—
|
|
Declaration Date
|
|
Per Common Share
|
|
Amount
|
|
Payment Date
|
||||
October 29, 2019 (special)
|
|
$
|
0.40
|
|
|
$
|
4,608
|
|
|
November 29, 2019
|
January 27, 2019 (special)
|
|
0.08
|
|
|
912
|
|
|
March 15, 2019
|
||
January 27, 2019
|
|
0.16
|
|
|
1,824
|
|
|
March 15, 2019
|
||
|
|
$
|
0.64
|
|
|
$
|
7,344
|
|
|
|
Declaration Date
|
|
Per Common Share
|
|
Amount
|
|
Payment Date
|
||||
October 21, 2018 (special)
|
|
$
|
0.18
|
|
|
$
|
2,048
|
|
|
November 23, 2018
|
October 21, 2018
|
|
0.16
|
|
|
1,820
|
|
|
November 23, 2018
|
||
July 18, 2018 (special)
|
|
0.25
|
|
|
2,844
|
|
|
August 24, 2018
|
||
July 18, 2018
|
|
0.15
|
|
|
1,707
|
|
|
August 24, 2018
|
||
April 17, 2018 (special)
|
|
1.76
|
|
|
20,022
|
|
|
May 25, 2018
|
||
April 17, 2018
|
|
0.14
|
|
|
1,592
|
|
|
May 25, 2018
|
||
February 6, 2018
|
|
0.13
|
|
|
1,479
|
|
|
March 9, 2018
|
||
|
|
$
|
2.77
|
|
|
$
|
31,512
|
|
|
|
|
Shares
|
|
Wtd. Avg. Price at Date of Issuance
|
|||
Nonvested at December 31, 2017
|
58,032
|
|
|
$
|
28.59
|
|
Granted
|
34,202
|
|
|
16.19
|
|
|
Vested
|
(46,748
|
)
|
|
26.31
|
|
|
Nonvested at December 31, 2018
|
45,486
|
|
|
21.61
|
|
|
Granted
|
1,140,088
|
|
|
7.27
|
|
|
Vested
|
(227,892
|
)
|
|
9.84
|
|
|
Nonvested at December 31, 2019
|
957,682
|
|
|
7.34
|
|
|
Foreign Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Available-For-Sale Investments
|
|
Total
|
||||||
Balance, December 31, 2018
|
$
|
(1,217
|
)
|
|
$
|
(33
|
)
|
|
$
|
(1,250
|
)
|
Other comprehensive income (loss)
|
(28
|
)
|
|
14
|
|
|
(14
|
)
|
|||
Balance, December 31, 2019
|
$
|
(1,245
|
)
|
|
$
|
(19
|
)
|
|
$
|
(1,264
|
)
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Domestic
|
$
|
(4,917
|
)
|
|
$
|
(3,391
|
)
|
Foreign
|
(680
|
)
|
|
37,912
|
|
||
Income (loss) before income taxes
|
$
|
(5,597
|
)
|
|
$
|
34,521
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Current:
|
|
|
|
||||
Federal
|
$
|
399
|
|
|
$
|
1,815
|
|
State
|
33
|
|
|
13
|
|
||
Foreign
|
398
|
|
|
1,300
|
|
||
Total current taxes
|
830
|
|
|
3,128
|
|
||
Deferred taxes
|
(816
|
)
|
|
358
|
|
||
Income tax provision
|
$
|
14
|
|
|
$
|
3,486
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Income tax at federal statutory rate
|
$
|
(1,175
|
)
|
|
$
|
7,249
|
|
Effect of permanent differences
|
260
|
|
|
346
|
|
||
Goodwill impairment
|
375
|
|
|
—
|
|
||
Tax Cut & Jobs Act one-time transition tax
|
—
|
|
|
(738
|
)
|
||
Global Intangible Low-Taxed Income
|
364
|
|
|
3,964
|
|
||
Change in valuation allowance
|
106
|
|
|
(9
|
)
|
||
Foreign rate differential
|
13
|
|
|
(6,541
|
)
|
||
Foreign tax credits
|
10
|
|
|
(786
|
)
|
||
Other reconciling items
|
61
|
|
|
1
|
|
||
Income tax provision
|
$
|
14
|
|
|
$
|
3,486
|
|
|
|
|
Year Ended December 31,
|
|||||||
|
Statutory Tax Rate
|
|
2019
|
|
2018
|
|||||
Cayman Islands
|
—
|
%
|
|
$
|
(2,746
|
)
|
|
$
|
31,560
|
|
Hong Kong
|
16.5
|
%
|
|
3,441
|
|
|
3,545
|
|
||
China
|
25.0
|
%
|
|
(1,644
|
)
|
|
2,725
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating losses
|
$
|
1,477
|
|
|
$
|
183
|
|
Stock-based compensation
|
925
|
|
|
191
|
|
||
Operating lease liabilities
|
335
|
|
|
—
|
|
||
Accrued expenses
|
67
|
|
|
1,248
|
|
||
Other
|
6
|
|
|
11
|
|
||
Total deferred tax assets
|
2,810
|
|
|
1,633
|
|
||
Valuation allowance
|
(289
|
)
|
|
(183
|
)
|
||
Net deferred tax assets
|
2,521
|
|
|
1,450
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Operating lease assets
|
(313
|
)
|
|
—
|
|
||
Foreign deferreds
|
(202
|
)
|
|
(186
|
)
|
||
Other
|
(169
|
)
|
|
(243
|
)
|
||
Total deferred tax liabilities
|
(684
|
)
|
|
(429
|
)
|
||
Net deferred tax assets
|
$
|
1,837
|
|
|
$
|
1,021
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales:
|
|
|
|
||||
Primary Reporting Segment
|
$
|
73,693
|
|
|
$
|
183,298
|
|
China
|
2,941
|
|
|
7,744
|
|
||
Russia and Kazakhstan
|
980
|
|
|
868
|
|
||
Total net sales
|
$
|
77,614
|
|
|
$
|
191,910
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales from external customers:
|
|
|
|
||||
United States
|
$
|
2,003
|
|
|
$
|
3,637
|
|
Canada
|
1,048
|
|
|
1,710
|
|
||
Peru
|
2,380
|
|
|
1,635
|
|
||
Hong Kong1
|
62,724
|
|
|
169,452
|
|
||
China
|
2,941
|
|
|
7,744
|
|
||
Taiwan
|
3,126
|
|
|
3,964
|
|
||
South Korea
|
368
|
|
|
493
|
|
||
Russia and Kazakhstan
|
980
|
|
|
868
|
|
||
Europe
|
1,370
|
|
|
1,644
|
|
||
Other foreign countries
|
674
|
|
|
763
|
|
||
Total net sales
|
$
|
77,614
|
|
|
$
|
191,910
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales by product and service:
|
|
|
|
||||
Product sales
|
$
|
73,048
|
|
|
$
|
181,865
|
|
Freight and other
|
6,106
|
|
|
13,329
|
|
||
Less: sales returns
|
(1,540
|
)
|
|
(3,284
|
)
|
||
Total net sales
|
$
|
77,614
|
|
|
$
|
191,910
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
379
|
|
|
$
|
521
|
|
Hong Kong
|
135
|
|
|
145
|
|
||
China
|
57
|
|
|
61
|
|
||
Other foreign countries
|
164
|
|
|
207
|
|
||
Total long-lived assets
|
$
|
735
|
|
|
$
|
934
|
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
•
|
Obtaining and documenting a sufficient sample of product orders during each quarterly period and ensuring that the underlying shipment documentation agrees with the shipment date as provided by the 3PLs; and
|
•
|
Review of monthly deferred revenue reports by logistics staff to ensure unshipped items are validated.
|
1.
|
Financial Statements. See Index to Consolidated Financial Statements under “Item 8. Financial Statements and Supplementary Data” of this report.
|
2.
|
Financial Statement Schedules. Financial statement schedules have been omitted because they are not required, not applicable, or because the required information is shown in the financial statements or notes thereto.
|
3.
|
Exhibits. The exhibits listed on the accompanying Exhibit Index are filed as a part of, and are incorporated by reference into, this report. We will furnish any of the exhibits referenced in the accompanying Exhibit Index to a requesting shareholder upon payment of a fee equal to our reasonable expenses in furnishing such exhibit(s).
|
|
NATURAL HEALTH TRENDS CORP.
|
|
|
|
|
Date: March 9, 2020
|
/s/ Chris T. Sharng
|
|
|
Chris T. Sharng
|
|
|
President
|
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Chris T. Sharng
|
|
President and Director
|
|
March 9, 2020
|
Chris T. Sharng
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Timothy S. Davidson
|
|
Senior Vice President and Chief Financial Officer
|
|
March 9, 2020
|
Timothy S. Davidson
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Randall A. Mason
|
|
Chairman of the Board and Director
|
|
March 9, 2020
|
Randall A. Mason
|
|
|
|
|
|
|
|
|
|
/s/ George K. Broady
|
|
Director
|
|
March 9, 2020
|
George K. Broady
|
|
|
|
|
|
|
|
|
|
/s/ Kin Y. Chung
|
|
Director
|
|
March 9, 2020
|
Kin Y. Chung
|
|
|
|
|
|
|
|
|
|
/s/ Yiu T. Chan
|
|
Director
|
|
March 9, 2020
|
Yiu T. Chan
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
+10.1
|
|
|
+10.2
|
|
|
+10.3
|
|
|
+10.4
|
|
|
+10.5
|
|
|
+10.6
|
|
|
+10.7
|
|
|
+10.8
|
|
|
+10.9
|
|
|
+10.10
|
|
|
+10.11
|
|
|
+10.12
|
|
|
10.13
|
|
|
21.1
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
|
|
|
|
|
|
101.INS
|
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation
|
101.DEF
|
|
XBRL Taxonomy Extension Definition
|
101.LAB
|
|
XBRL Taxonomy Extension Labels
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation
|
|
|
+ Management contract or compensatory plan
|
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