Reliv International reports 6.5% decline in fourth-quarter net sales

Feb 25 2010

Reliv International, Inc. (Nasdaq: RELV), a nutrition and direct selling company, today reported its fourth-quarter and full-year 2009 earnings.  Earnings per share increased in the fourth quarter of 2009 compared to the same quarter in 2008.

Fourth-quarter results

Net sales for the fourth quarter of 2009 equaled $20.7 million, a decline of 6.5 percent compared to the fourth quarter of 2008.  Net sales in the United States for the fourth quarter of 2009 totaled $17.8 million, a decline of 8.7 percent compared to the same quarter in 2008.  Sales outside of the U.S. rose 9.6 percent in the quarter to $2.9 million.  Approximately 75 percent of the increase in international sales was due to foreign currency fluctuations.

Net income for the quarter more than tripled to $769,000 compared to $250,000 for the same period of 2008.  Earnings per share increased from $0.02 to $0.06 in the respective quarters.  Both net income and earnings per share in the fourth quarter of 2008 were reduced by investment losses on a private equity fund and other investments.

Income from operations in the fourth quarter equaled $1.1 million, a decline of 18.2 percent compared to the fourth quarter of 2008.

Full-year results

Net sales for 2009 were $85.4 million compared to $98.2 million in 2008.  U.S. net sales in 2009 totaled $75.0 million, down 12.1 percent compared to 2008 net sales.  International net sales, at $10.4 million, were down 19.2 percent in 2009 compared to 2008.  Approximately 50 percent of the decrease was due to currency fluctuations.

Net income for 2009 equaled $2.5 million or $0.20 per diluted share, compared to $2.9 million or $0.19 per diluted share in 2008.  Earnings per share in 2009 benefited from a significant repurchase of stock during the year.  Earnings per share and net income in 2008, as noted above, were reduced by investment losses.

Net cash generated from operating activities in 2009 was $5.5 million compared to $3.7 million for 2008.  Reliv had cash and cash equivalents of $5.8 million as of Dec. 31, 2009.

New distributor enrollments were up for both the fourth quarter and the full year of 2009.  Quarterly enrollments rose nearly 19 percent compared to the fourth quarter of 2008.  For 2009, new enrollments rose approximately 9.4 percent over sponsoring in 2008.

As of Dec. 31, 2009, Reliv had approximately 67,940 distributors, up approximately 1 percent from Dec. 31, 2008.  The number of U.S. distributors as of Dec. 31, 2009, was 54,040, representing a 1.1 percent increase from the end of 2008.  Reliv distributors outside of the United States totaled 13,900 as of Dec. 31, 2009, up slightly compared to Dec. 31, 2008.

Robert L. Montgomery, chairman, president and chief executive officer, said, "The recession continued to negatively affect our distributors and customers in the fourth quarter, but the impact wasn't as dramatic as in the first three quarters of the year."

Montgomery said, "We slowed the rate of our sales decline significantly in the fourth quarter, reflecting a smaller decline in the size of average orders in the quarter.  Our goal, of course, is to turn that into growth in 2010," he added.  

"We have a stable and slightly growing distributor base," Montgomery said.  "We've kept costs under control so that when sales increase, we should see a solid increase in net income as well.  I'm confident in our 2010 growth strategy to increase our brand awareness by emphasizing the role of Reliv supplements in living a healthy, active lifestyle."  

Montgomery said, "The basics of our business remain strong.  Reliv makes nutrition simple.  Our science-based nutritional supplements are second to none, and we offer our distributors an outstanding business opportunity."