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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.05 | 6.70 | 7.00 | 8 | 10:59:45 |
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
59-2705336
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $0.001 per share
|
NHTC
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
þ
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
☑
|
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
|
||
|
|
|
|
||
|
|
|
•
|
We could be adversely affected by management changes or an inability to attract and retain key management, directors and consultants;
|
•
|
Because our Hong Kong operations account for a substantial portion of our overall business, and substantially all of our Hong Kong business is derived from the sale of products to members in China, any material adverse change in our business relating to either Hong Kong or China would likely have a material adverse impact on our overall business;
|
•
|
Our operations in China are subject to compliance with a myriad of applicable laws and regulations, and any actual or alleged violations of those laws or government actions otherwise directed at us could have a material adverse impact on our business and the value of our company;
|
•
|
Our failure to maintain and expand our member relationships could adversely affect our business;
|
•
|
We are currently involved in, and may in the future face, lawsuits, claims, and governmental proceedings and inquiries that could harm our business;
|
•
|
Although virtually all of our members are independent contractors, improper member actions that violate laws or regulations could harm our business;
|
•
|
Direct-selling laws and regulations may prohibit or severely restrict our direct sales efforts and cause our revenue and profitability to decline, and regulators could adopt new regulations that harm our business;
|
•
|
The high level of competition in our industry could adversely affect our business;
|
•
|
Challenges by third parties to the legality of our business operations could harm our business;
|
•
|
An increase in the amount of compensation paid to members would reduce profitability;
|
•
|
Currency exchange rate fluctuations could lower our revenue and net income;
|
•
|
Changes in tax or duty laws, and unanticipated tax or duty liabilities, could adversely affect our net income;
|
•
|
Transfer pricing regulations affect our business and results of operations;
|
•
|
Our products and related activities are subject to extensive government regulation, which could delay, limit or prevent the sale of some of our products in some markets;
|
•
|
Failure of new products to gain member and market acceptance could harm our business;
|
•
|
New regulations governing the marketing and sale of nutritional supplements could harm our business;
|
•
|
Regulations governing the production and marketing of our personal care products could harm our business;
|
•
|
If we are found not to be in compliance with good manufacturing practices our operations could be harmed;
|
•
|
Failure to comply with domestic and foreign laws and regulations governing product claims and advertising could harm our business;
|
•
|
Adverse publicity associated with our products, ingredients or network marketing program, or those of similar companies, could harm our financial condition and operating results;
|
•
|
We are subject to risks relating to product concentration and lack of revenue diversification;
|
•
|
We rely on a limited number of independent third parties to manufacture and supply our products;
|
•
|
Growth may be impeded by the political and economic risks of entering and operating in foreign markets;
|
•
|
We are subject to anti-bribery laws, including the U.S. Foreign Corrupt Practices Act;
|
•
|
Recently enacted tariffs, other potential changes to tariff and import/export regulations, and ongoing trade disputes between the United States and other jurisdictions, particularly China, may have a negative effect on global economic conditions and our business, financial results and financial condition;
|
•
|
We may be held responsible for certain taxes or assessments relating to the activities of our members and service providers, which could harm our financial condition and operating results;
|
•
|
We may be unable to protect or use our intellectual property rights;
|
•
|
We do not have a comprehensive product liability insurance program and product liability claims could hurt our business;
|
•
|
We identified a material weakness in our internal control over financial reporting. If we do not adequately address this material weakness or if other material weaknesses or significant deficiencies in our internal control over financial reporting are discovered, our financial statements could contain material misstatements and our business, operations and stock price may be adversely affected;
|
•
|
We rely on and are subject to risks associated with our reliance upon information technology systems;
|
•
|
System disruptions or failures, cybersecurity risks, and compromises of data could harm our business;
|
•
|
Our systems, software and data reside on third-party servers, exposing us to risks that disruption or intrusion of those servers could temporarily or permanently interrupt our access and damage our business;
|
•
|
Terrorist attacks, acts of war, epidemics or natural disasters may seriously harm our business;
|
•
|
We may experience negative cash flows, which may require that we seek debt or equity financing and could have a significant adverse effect on our business and threaten our solvency;
|
•
|
Disappointing quarterly revenue or operating results could cause the price of our common stock to fall;
|
•
|
Our common stock is particularly subject to volatility because of the industry in which we operate;
|
•
|
Our common stock continues to experience wide fluctuations in trading volumes and prices. This may make it more difficult for holders of our common stock to sell shares when they want and at prices they find attractive; and
|
•
|
Future sales by us or our existing stockholders could depress the market price of our common stock.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
108,106
|
|
|
$
|
132,653
|
|
Inventories
|
10,343
|
|
|
12,165
|
|
||
Other current assets
|
6,127
|
|
|
5,369
|
|
||
Total current assets
|
124,576
|
|
|
150,187
|
|
||
Property and equipment, net
|
887
|
|
|
934
|
|
||
Operating lease right-of-use assets
|
3,796
|
|
|
—
|
|
||
Goodwill
|
1,764
|
|
|
1,764
|
|
||
Restricted cash
|
3,000
|
|
|
2,998
|
|
||
Deferred tax asset
|
1,210
|
|
|
1,207
|
|
||
Other assets
|
858
|
|
|
831
|
|
||
Total assets
|
$
|
136,091
|
|
|
$
|
157,921
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
675
|
|
|
$
|
1,631
|
|
Accrued commissions
|
7,051
|
|
|
12,502
|
|
||
Other accrued expenses
|
3,676
|
|
|
6,121
|
|
||
Deferred revenue
|
3,390
|
|
|
6,795
|
|
||
Amounts held in eWallets
|
13,879
|
|
|
14,611
|
|
||
Operating lease liabilities
|
1,741
|
|
|
—
|
|
||
Other current liabilities
|
1,116
|
|
|
1,424
|
|
||
Total current liabilities
|
31,528
|
|
|
43,084
|
|
||
Income taxes payable
|
15,365
|
|
|
16,982
|
|
||
Deferred tax liability
|
187
|
|
|
186
|
|
||
Long-term incentive
|
7,531
|
|
|
7,808
|
|
||
Operating lease liabilities
|
2,128
|
|
|
—
|
|
||
Total liabilities
|
56,739
|
|
|
68,060
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
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 June 30, 2019 and December 31, 2018
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
86,249
|
|
|
86,415
|
|
||
Retained earnings
|
40,169
|
|
|
44,431
|
|
||
Accumulated other comprehensive loss
|
(1,192
|
)
|
|
(1,250
|
)
|
||
Treasury stock, at cost; 2,193,448 and 1,603,322 shares at June 30, 2019 and December 31, 2018, respectively
|
(45,887
|
)
|
|
(39,748
|
)
|
||
Total stockholders’ equity
|
79,352
|
|
|
89,861
|
|
||
Total liabilities and stockholders’ equity
|
$
|
136,091
|
|
|
$
|
157,921
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
23,428
|
|
|
$
|
50,910
|
|
|
$
|
42,756
|
|
|
$
|
103,277
|
|
Cost of sales
|
5,407
|
|
|
10,399
|
|
|
10,631
|
|
|
20,620
|
|
||||
Gross profit
|
18,021
|
|
|
40,511
|
|
|
32,125
|
|
|
82,657
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Commissions expense
|
11,398
|
|
|
22,310
|
|
|
20,896
|
|
|
45,290
|
|
||||
Selling, general and administrative expenses
|
6,627
|
|
|
8,093
|
|
|
13,942
|
|
|
17,215
|
|
||||
Total operating expenses
|
18,025
|
|
|
30,403
|
|
|
34,838
|
|
|
62,505
|
|
||||
Income (loss) from operations
|
(4
|
)
|
|
10,108
|
|
|
(2,713
|
)
|
|
20,152
|
|
||||
Other income, net
|
373
|
|
|
53
|
|
|
805
|
|
|
216
|
|
||||
Income (loss) before income taxes
|
369
|
|
|
10,161
|
|
|
(1,908
|
)
|
|
20,368
|
|
||||
Income tax provision (benefit)
|
(28
|
)
|
|
1,138
|
|
|
(382
|
)
|
|
2,521
|
|
||||
Net income (loss)
|
$
|
397
|
|
|
$
|
9,023
|
|
|
$
|
(1,526
|
)
|
|
$
|
17,847
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.04
|
|
|
$
|
0.80
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.58
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.80
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.58
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,082
|
|
|
11,298
|
|
|
11,207
|
|
|
11,292
|
|
||||
Diluted
|
11,082
|
|
|
11,305
|
|
|
11,207
|
|
|
11,297
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
397
|
|
|
$
|
9,023
|
|
|
$
|
(1,526
|
)
|
|
$
|
17,847
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(212
|
)
|
|
(762
|
)
|
|
47
|
|
|
(365
|
)
|
||||
Unrealized gains (losses) on available-for-sale securities
|
(6
|
)
|
|
15
|
|
|
11
|
|
|
4
|
|
||||
Comprehensive income (loss)
|
$
|
179
|
|
|
$
|
8,276
|
|
|
$
|
(1,468
|
)
|
|
$
|
17,486
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Treasury Stock
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||||||||
BALANCE, December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,415
|
|
|
$
|
44,431
|
|
|
$
|
(1,250
|
)
|
|
(1,603,322
|
)
|
|
$
|
(39,748
|
)
|
|
$
|
89,861
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,923
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,923
|
)
|
|||||||
Common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
22,603
|
|
|
543
|
|
|
377
|
|
|||||||
Dividends declared, $0.24/share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,736
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,736
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
259
|
|
|
—
|
|
|
—
|
|
|
259
|
|
|||||||
Unrealized gains on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||||
BALANCE, March 31, 2019
|
—
|
|
|
—
|
|
|
12,979,414
|
|
|
13
|
|
|
86,249
|
|
|
39,772
|
|
|
(974
|
)
|
|
(1,580,719
|
)
|
|
(39,205
|
)
|
|
85,855
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(612,729
|
)
|
|
(6,682
|
)
|
|
(6,682
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(212
|
)
|
|
—
|
|
|
—
|
|
|
(212
|
)
|
|||||||
Unrealized losses on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
BALANCE, June 30, 2019
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,249
|
|
|
$
|
40,169
|
|
|
$
|
(1,192
|
)
|
|
(2,193,448
|
)
|
|
$
|
(45,887
|
)
|
|
$
|
79,352
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
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
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,824
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,824
|
|
|||||||
Common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
34,202
|
|
|
822
|
|
|
554
|
|
|||||||
Dividends declared, $0.13/share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|||||||
Unrealized losses on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
BALANCE, March 31, 2018
|
—
|
|
|
—
|
|
|
12,979,414
|
|
|
13
|
|
|
86,415
|
|
|
52,253
|
|
|
(27
|
)
|
|
(1,603,322
|
)
|
|
(39,748
|
)
|
|
98,906
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,023
|
|
|||||||
Dividends declared, $1.90/share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,614
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,614
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(762
|
)
|
|
—
|
|
|
—
|
|
|
(762
|
)
|
|||||||
Unrealized gains on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||||
BALANCE, June 30, 2018
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,415
|
|
|
$
|
39,662
|
|
|
$
|
(774
|
)
|
|
(1,603,322
|
)
|
|
$
|
(39,748
|
)
|
|
$
|
85,568
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
(1,526
|
)
|
|
$
|
17,847
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
189
|
|
|
235
|
|
||
Noncash lease expense
|
914
|
|
|
—
|
|
||
Deferred income taxes
|
(3
|
)
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Inventories
|
1,881
|
|
|
(2,057
|
)
|
||
Other current assets
|
(752
|
)
|
|
1,955
|
|
||
Other assets
|
(35
|
)
|
|
(73
|
)
|
||
Accounts payable
|
(956
|
)
|
|
1,246
|
|
||
Accrued commissions
|
(5,475
|
)
|
|
(707
|
)
|
||
Other accrued expenses
|
(1,946
|
)
|
|
1,119
|
|
||
Deferred revenue
|
(3,409
|
)
|
|
(592
|
)
|
||
Amounts held in eWallets
|
(765
|
)
|
|
(192
|
)
|
||
Operating lease liabilities
|
(964
|
)
|
|
—
|
|
||
Income taxes payable
|
(1,617
|
)
|
|
(1,657
|
)
|
||
Other current liabilities
|
(318
|
)
|
|
(72
|
)
|
||
Long-term incentive
|
(277
|
)
|
|
(562
|
)
|
||
Net cash provided by (used in) operating activities
|
(15,059
|
)
|
|
16,490
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(141
|
)
|
|
(113
|
)
|
||
Net cash used in investing activities
|
(141
|
)
|
|
(113
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Repurchase of common stock
|
(6,682
|
)
|
|
—
|
|
||
Dividends paid
|
(2,736
|
)
|
|
(23,093
|
)
|
||
Net cash used in financing activities
|
(9,418
|
)
|
|
(23,093
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
73
|
|
|
(381
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(24,545
|
)
|
|
(7,097
|
)
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period
|
135,651
|
|
|
138,478
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period
|
$
|
111,106
|
|
|
$
|
131,381
|
|
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
|
|
|
|
||||
Issuance of treasury stock for employee awards, net
|
$
|
377
|
|
|
$
|
554
|
|
Right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
4,697
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
Americas
1
|
$
|
1,393
|
|
|
5.9
|
%
|
|
$
|
1,855
|
|
|
3.6
|
%
|
|
$
|
2,908
|
|
|
6.8
|
%
|
|
$
|
3,391
|
|
|
3.3
|
%
|
Hong Kong
2
|
19,524
|
|
|
83.3
|
|
|
44,615
|
|
|
87.7
|
|
|
34,890
|
|
|
81.6
|
|
|
92,234
|
|
|
89.3
|
|
||||
China
|
557
|
|
|
2.4
|
|
|
2,553
|
|
|
5.0
|
|
|
1,613
|
|
|
3.8
|
|
|
3,812
|
|
|
3.7
|
|
||||
Taiwan
|
1,057
|
|
|
4.5
|
|
|
937
|
|
|
1.8
|
|
|
1,691
|
|
|
3.9
|
|
|
1,998
|
|
|
1.9
|
|
||||
South Korea
|
84
|
|
|
0.4
|
|
|
140
|
|
|
0.3
|
|
|
190
|
|
|
0.4
|
|
|
259
|
|
|
0.3
|
|
||||
Japan
|
50
|
|
|
0.2
|
|
|
44
|
|
|
0.1
|
|
|
94
|
|
|
0.2
|
|
|
109
|
|
|
0.1
|
|
||||
Singapore
|
18
|
|
|
0.1
|
|
|
51
|
|
|
0.1
|
|
|
30
|
|
|
0.1
|
|
|
82
|
|
|
0.1
|
|
||||
Malaysia
|
85
|
|
|
0.4
|
|
|
57
|
|
|
0.1
|
|
|
119
|
|
|
0.3
|
|
|
100
|
|
|
0.1
|
|
||||
Russia and Kazakhstan
|
200
|
|
|
0.8
|
|
|
239
|
|
|
0.5
|
|
|
418
|
|
|
1.0
|
|
|
442
|
|
|
0.4
|
|
||||
Europe
|
331
|
|
|
1.4
|
|
|
419
|
|
|
0.8
|
|
|
674
|
|
|
1.6
|
|
|
850
|
|
|
0.8
|
|
||||
India
|
129
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
23,428
|
|
|
100.0
|
%
|
|
$
|
50,910
|
|
|
100.0
|
%
|
|
$
|
42,756
|
|
|
100.0
|
%
|
|
$
|
103,277
|
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Product sales
|
$
|
22,100
|
|
|
$
|
48,458
|
|
|
$
|
40,623
|
|
|
$
|
97,823
|
|
Freight and other
|
1,745
|
|
|
3,434
|
|
|
3,245
|
|
|
7,186
|
|
||||
Less: sales returns
|
(417
|
)
|
|
(982
|
)
|
|
(1,112
|
)
|
|
(1,732
|
)
|
||||
Total net sales
|
$
|
23,428
|
|
|
$
|
50,910
|
|
|
$
|
42,756
|
|
|
$
|
103,277
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Income (loss)
(Numerator)
|
|
Shares
(Denominator)
|
|
Per Share Amount
|
|
Income (loss)
(Numerator)
|
|
Shares
(Denominator)
|
|
Per Share Amount
|
||||||||||
Basic net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income available to common stockholders
|
$
|
397
|
|
|
11,082
|
|
|
$
|
0.04
|
|
|
$
|
9,023
|
|
|
11,298
|
|
|
$
|
0.80
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-vested restricted stock
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
7
|
|
|
|
|
||||
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income available to common stockholders plus assumed conversions
|
$
|
397
|
|
|
11,082
|
|
|
$
|
0.04
|
|
|
$
|
9,023
|
|
|
11,305
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Income
(Numerator) |
|
Shares
(Denominator) |
|
Per Share Amount
|
|
Income
(Numerator) |
|
Shares
(Denominator) |
|
Per Share Amount
|
||||||||||
Basic net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) available to common stockholders
|
$
|
(1,526
|
)
|
|
11,207
|
|
|
$
|
(0.14
|
)
|
|
$
|
17,847
|
|
|
11,292
|
|
|
$
|
1.58
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-vested restricted stock
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
5
|
|
|
|
|
||||
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) available to common stockholders plus assumed conversions
|
$
|
(1,526
|
)
|
|
11,207
|
|
|
$
|
(0.14
|
)
|
|
$
|
17,847
|
|
|
11,297
|
|
|
$
|
1.58
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Cash, cash equivalents and restricted cash:
|
|
|
|
||||
Cash
|
$
|
21,851
|
|
|
$
|
47,323
|
|
Cash equivalents
|
86,255
|
|
|
85,330
|
|
||
|
108,106
|
|
|
132,653
|
|
||
Restricted cash
|
3,000
|
|
|
2,998
|
|
||
|
$
|
111,106
|
|
|
$
|
135,651
|
|
Inventories:
|
|
|
|
||||
Finished goods
|
$
|
9,407
|
|
|
$
|
11,171
|
|
Raw materials
|
1,367
|
|
|
1,145
|
|
||
Reserve for obsolescence
|
(431
|
)
|
|
(151
|
)
|
||
|
$
|
10,343
|
|
|
$
|
12,165
|
|
Other accrued expenses:
|
|
|
|
||||
Sales returns
|
$
|
387
|
|
|
$
|
801
|
|
Employee-related expense
|
2,384
|
|
|
4,051
|
|
||
Warehousing, inventory-related and other
|
905
|
|
|
1,269
|
|
||
|
$
|
3,676
|
|
|
$
|
6,121
|
|
Deferred revenue:
|
|
|
|
||||
Unshipped product
|
$
|
1,215
|
|
|
$
|
4,574
|
|
Auto ship advances
|
1,983
|
|
|
1,876
|
|
||
Other
|
192
|
|
|
345
|
|
||
|
$
|
3,390
|
|
|
$
|
6,795
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Adjusted Cost
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Adjusted Cost
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||
Municipal bonds and notes
|
$
|
1,836
|
|
|
$
|
—
|
|
|
$
|
1,836
|
|
|
$
|
12,149
|
|
|
$
|
(7
|
)
|
|
$
|
12,142
|
|
Corporate debt securities
|
45,294
|
|
|
(22
|
)
|
|
45,272
|
|
|
51,862
|
|
|
(26
|
)
|
|
51,836
|
|
||||||
Financial institution instruments
|
39,147
|
|
|
—
|
|
|
39,147
|
|
|
21,352
|
|
|
—
|
|
|
21,352
|
|
||||||
Total available-for-sale investments
|
$
|
86,277
|
|
|
$
|
(22
|
)
|
|
$
|
86,255
|
|
|
$
|
85,363
|
|
|
$
|
(33
|
)
|
|
$
|
85,330
|
|
|
June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Amounts included in cash and cash equivalents
|
$
|
86,255
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,255
|
|
Total assets measured at fair value on a recurring basis
|
$
|
86,255
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,255
|
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Amounts included in cash and cash equivalents
|
$
|
85,330
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85,330
|
|
Total assets measured at fair value on a recurring basis
|
$
|
85,330
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85,330
|
|
Declaration Date
|
|
Per Share
|
|
Amount
|
|
Record Date
|
|
Payment Date
|
||||
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
|
|
|
|
$
|
0.24
|
|
|
$
|
2,736
|
|
|
|
|
|
|
Shares
|
|
Wtd. Avg. Price at Date of Issuance
|
|||
Nonvested at December 31, 2018
|
45,486
|
|
|
$
|
21.61
|
|
Granted
|
22,603
|
|
|
16.67
|
|
|
Vested
|
(22,917
|
)
|
|
23.28
|
|
|
Nonvested at June 30, 2019
|
45,172
|
|
|
18.28
|
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gains/(Losses) on Available-For-Sale Investments
|
|
Total
|
||||||
Balance, December 31, 2018
|
$
|
(1,217
|
)
|
|
$
|
(33
|
)
|
|
$
|
(1,250
|
)
|
Other comprehensive income
|
47
|
|
|
11
|
|
|
58
|
|
|||
Balance, June 30, 2019
|
$
|
(1,170
|
)
|
|
$
|
(22
|
)
|
|
$
|
(1,192
|
)
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating leases
|
$
|
523
|
|
|
$
|
1,032
|
|
Short-term leases
|
62
|
|
|
128
|
|
||
Total lease cost
|
$
|
585
|
|
|
$
|
1,160
|
|
Weighted-average remaining lease term (in years)
|
3.3
|
|
Weighted-average discount rate
|
5.5
|
%
|
Remainder of 2019
|
$
|
964
|
|
2020
|
1,655
|
|
|
2021
|
619
|
|
|
2022
|
431
|
|
|
2023
|
246
|
|
|
Thereafter
|
400
|
|
|
Total lease payments
|
$
|
4,315
|
|
Less: imputed interest
|
(446
|
)
|
|
Present value of lease liabilities
|
$
|
3,869
|
|
•
|
through commissions paid on the accumulated bonus volume from product purchases made by their down-line members and customers; and
|
•
|
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).
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
23.1
|
|
|
20.4
|
|
|
24.9
|
|
|
20.0
|
|
Gross profit
|
76.9
|
|
|
79.6
|
|
|
75.1
|
|
|
80.0
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Commissions expense
|
48.7
|
|
|
43.8
|
|
|
48.9
|
|
|
43.8
|
|
Selling, general and administrative expenses
|
28.3
|
|
|
15.9
|
|
|
32.6
|
|
|
16.7
|
|
Total operating expenses
|
77.0
|
|
|
59.7
|
|
|
81.5
|
|
|
60.5
|
|
Income (loss) from operations
|
(0.1
|
)
|
|
19.9
|
|
|
(6.4
|
)
|
|
19.5
|
|
Other income, net
|
1.6
|
|
|
0.1
|
|
|
1.9
|
|
|
0.2
|
|
Income (loss) before income taxes
|
1.5
|
|
|
20.0
|
|
|
(4.5
|
)
|
|
19.7
|
|
Income tax provision (benefit)
|
(0.1
|
)
|
|
2.2
|
|
|
(0.9
|
)
|
|
2.4
|
|
Net income (loss)
|
1.6
|
%
|
|
17.8
|
%
|
|
(3.6
|
)%
|
|
17.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
Americas
1
|
$
|
1,393
|
|
|
5.9
|
%
|
|
$
|
1,855
|
|
|
3.6
|
%
|
|
$
|
2,908
|
|
|
6.8
|
%
|
|
$
|
3,391
|
|
|
3.3
|
%
|
Hong Kong
2
|
19,524
|
|
|
83.3
|
|
|
44,615
|
|
|
87.7
|
|
|
34,890
|
|
|
81.6
|
|
|
92,234
|
|
|
89.3
|
|
||||
China
|
557
|
|
|
2.4
|
|
|
2,553
|
|
|
5.0
|
|
|
1,613
|
|
|
3.8
|
|
|
3,812
|
|
|
3.7
|
|
||||
Taiwan
|
1,057
|
|
|
4.5
|
|
|
937
|
|
|
1.8
|
|
|
1,691
|
|
|
3.9
|
|
|
1,998
|
|
|
1.9
|
|
||||
South Korea
|
84
|
|
|
0.4
|
|
|
140
|
|
|
0.3
|
|
|
190
|
|
|
0.4
|
|
|
259
|
|
|
0.3
|
|
||||
Japan
|
50
|
|
|
0.2
|
|
|
44
|
|
|
0.1
|
|
|
94
|
|
|
0.2
|
|
|
109
|
|
|
0.1
|
|
||||
Singapore
|
18
|
|
|
0.1
|
|
|
51
|
|
|
0.1
|
|
|
30
|
|
|
0.1
|
|
|
82
|
|
|
0.1
|
|
||||
Malaysia
|
85
|
|
|
0.4
|
|
|
57
|
|
|
0.1
|
|
|
119
|
|
|
0.3
|
|
|
100
|
|
|
0.1
|
|
||||
Russia and Kazakhstan
|
200
|
|
|
0.8
|
|
|
239
|
|
|
0.5
|
|
|
418
|
|
|
1.0
|
|
|
442
|
|
|
0.4
|
|
||||
Europe
|
331
|
|
|
1.4
|
|
|
419
|
|
|
0.8
|
|
|
674
|
|
|
1.6
|
|
|
850
|
|
|
0.8
|
|
||||
India
|
129
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
23,428
|
|
|
100.0
|
%
|
|
$
|
50,910
|
|
|
100.0
|
%
|
|
$
|
42,756
|
|
|
100.0
|
%
|
|
$
|
103,277
|
|
|
100.0
|
%
|
Declaration Date
|
|
Per Share
|
|
Amount
|
|
Record Date
|
|
Payment Date
|
||||
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
|
|
|
|
$
|
0.24
|
|
|
$
|
2,736
|
|
|
|
|
|
•
|
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.
|
Period
|
|
Total Number of Shares Purchased
(a)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(b)
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
(c)
(in thousands)
|
||||||
May 1-31, 2019
|
|
612,729
|
|
|
$
|
10.90
|
|
|
612,729
|
|
|
$
|
29,640
|
|
(a)
|
The shares were purchased in both open market transactions and directly from George K. Broady, a director and beneficial owner of more than 5% of the Company’s outstanding shares of common stock.
|
(b)
|
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. On May 16, 2019, the Board of Directors authorized the Company to proceed with the purchase of up to $8.0 million in shares of common stock under the foregoing stock repurchase program. During May 2019, we purchased a total of
612,729
shares of our common stock for an aggregate purchase price of $6.7 million, plus transaction costs, under the stock repurchase program.
|
(c)
|
As of
June 30, 2019
,
$29.6 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.
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
10.1
|
|
|
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
|
|
NATURAL HEALTH TRENDS CORP.
|
|
|
|
|
Date: August 7, 2019
|
/s/ Timothy S. Davidson
|
|
|
Timothy S. Davidson
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
10.1
|
|
|
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
|
1 Year Natural Health Trends Chart |
1 Month Natural Health Trends Chart |
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