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Form 8-K RELIV INTERNATIONAL INC For: Mar 04

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March 4, 2015 9:42 AM EST

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 4, 2015

 

RELIV’ INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

000-19932 37-1172197
(Commission File Number) (IRS Employer Identification No.)
   
136 Chesterfield Industrial Boulevard Chesterfield, Missouri  63005
(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (636) 537-9715

 

Not applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
  
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

 

 
 

 

Item 2.02. Results of Operations and Financial Condition

 

On March 4, 2015, Reliv International, Inc. issued a press release reporting earnings and other financial results for its fourth quarter and full year ended December 31, 2014. A copy of the press release is attached as Exhibit 99.

 

 

Item 9.01. Financial Statements and Exhibits

 

(c)Exhibits

 

99Press Release dated March 4, 2015 captioned: “Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2014.”

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, Reliv International, Inc. has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, in the City of Chesterfield, State of Missouri, on March 4, 2015.

 

  RELIV’ INTERNATIONAL, INC.  
     
  By: /s/ Steven D. Albright  
    Steven D. Albright  
    Chief Financial Officer  
       

 

 

 
 

 

EXHIBIT INDEX

 

Exhibit No. Description
   
99 Press Release dated March 4, 2015 captioned:  “Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2014.”

 

 

 

 

Exhibit 99

NEWS RELEASE

 

For more information, contact:

 

Steve Albright

Chief Financial Officer

(636) 733-1305

 

FOR IMMEDIATE DISTRIBUTION

 

Reliv International Reports Fourth-Quarter

and Full-Year Financial Results for 2014

 

CHESTERFIELD, MO, March 4, 2015 – Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the fourth quarter and full year of 2014.

 

Fourth-Quarter Results

Reliv reported net sales of $14.1 million for the fourth quarter of 2014, compared with sales of $17.4 million for the fourth quarter of 2013. U.S. sales decreased by 19.8 percent for the quarter compared with the same quarter in 2013. A significant portion of the decline in U.S. net sales was due to a promotion launched in fall 2013 that lowered the sales volume level needed to qualify as a Master Affiliate in the United States. This resulted in a shifting of and reduction in requalification orders that would normally be received in January 2014 to the fourth quarter of 2013. International sales for the quarter decreased 16.0 percent. A strengthening U.S. dollar compared to the year-ago quarter accounted for 4.0 percent of the decline.

 

Reliv reported net income of $998,000, or $0.08 per diluted share, for the fourth quarter of 2014 compared with net income of $503,000, or $0.04 per diluted share, for the fourth quarter of 2013. The fourth quarter of 2014 was favorably impacted by an income tax benefit of $575,000 primarily due to recognition of a deferred tax benefit of $758,000 related to net operating loss carryforwards in a European subsidiary. Income from operations for the fourth quarter of 2014 was $513,000 compared with $888,000 in the same quarter of 2013.

 

Full-Year Results

Reliv reported net sales of $57.3 million for 2014 compared with net sales of $68.2 million in 2013. U.S. net sales decreased from $53.7 million to $43.3 million. As previously noted, some of that decline can be attributed to the promotion launched in fall 2013.

 

Net sales in Reliv’s foreign markets for 2014 decreased 3.7 percent compared with net sales for 2013. Europe once again topped all international markets with $8.3 million in net sales, an increase of 4.4 percent over 2013.

 

Net income for 2014 was $725,000 compared with $777,000 in 2013. Earnings per diluted share were $0.06 for both 2014 and 2013. Net income for 2014 was favorably impacted by the income tax benefit in the European subsidiary as previously noted. Income from operations for 2014 was $96,000 compared to $1.5 million in 2013. Selling, general and administrative expenses were $25.0 million versus $27.8 million in 2013, as cost reductions implemented in the latter half of 2014 helped offset the impact of the sales decline.

 

“In 2014 Reliv completed a series of critical transitions in our distributor compensation plan, our corporate leadership, and our product line, coupled with a cost containment initiative, to better position the company for future growth,” said Robert L. Montgomery, Chairman and CEO of Reliv. “This process has come with anticipated adjustments. Yet after recording net losses in each of the first two quarters of 2014, we achieved profitability in both the third and fourth quarters. We believe the return to profitability is evidence that the transitions and cost containments initiated by Reliv are gaining traction.”

 

 
 

 

“Reliv started 2014 by announcing that reduced profit level qualifications for distributors would remain in place in Reliv’s compensation plan. First introduced as a promotion in the final months of 2013, the lower qualifications were embraced by distributors,” Montgomery continued.

 

“We believe as the strategy to increase focus and promotion of the Reliv business opportunity gains traction, the ability for distributors to access the highest profit level at these qualification levels will result in an increase in new distributors. Marketing and promotional strategies have been developed that are consistent with this goal.”

 

Montgomery added: “With the acquisition of the LunaRich technology, Reliv’s marketing efforts in recent years focused on consumer education and establishing Reliv as the Nutritional Epigenetics Company. With our product and science messaging in place and our competitive advantage established, we are focused on the Reliv business opportunity. We believe we now have all elements in place – field development, corporate leadership, product focus and business plan – for this strategy to take hold and be embraced by our field.”

 

“In the network marketing industry, product consumers form the foundation, but it is the expansion of distribution networks that drives growth. Reliv’s product foundation is stronger than ever and, with distributor-focused business initiatives now taking hold, we are ready to build a thriving network of active entrepreneurs on top of it.”

 

As of December 31, 2014, Reliv had 47,970 distributors – a decrease of 9.6 percent from December 31, 2013 – of which 7,130 are Master Affiliate level and above. The number of Master Affiliates decreased by 5.4 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

 

Reliv had cash and cash equivalents of $5.0 million as of December 31, 2014, a decrease of $1.7 million from the balance as of December 31, 2013. Net cash of $392,000 was used in operating activities in 2014 compared to net cash of $2.5 million provided by operations in 2013.

About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote essential nutrition, weight loss, athletic performance, digestive health, women's health, anti-aging and healthy energy. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, the peptide behind many of soy’s health benefits. The company sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at www.reliv.com, or on Facebook, Twitter or YouTube.

Statements made in this news 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 Company’s web site, www.reliv.com.

--FINANCIAL HIGHLIGHTS FOLLOW –

 

 
 

 

Reliv International, Inc. and Subsidiaries

ADD TWO

 

Condensed Consolidated Balance Sheets

 

   December 31   December 31 
   2014   2013 
   (Unaudited)   (Audited) 
Assets          
Current Assets:          
Cash and cash equivalents  $4,989,392   $6,656,798 
Accounts receivable, less allowances of $26,300 in 2014 and $31,800 in 2013   265,530    148,630 
Accounts and note due from employees and distributors   121,208    129,852 
Inventories   5,177,465    5,214,690 
Other current assets   979,615    1,006,099 
           
Total current assets   11,533,210    13,156,069 
           
Deferred income taxes   686,000    - 
Other assets   4,776,855    4,511,360 
Intangible assets, net   2,925,775    3,195,903 
Net property, plant and equipment   6,925,970    6,735,419 
           
Total Assets  $26,847,810   $27,598,751 
           
Liabilities and Stockholders' Equity          
           
Total current liabilities  $5,884,480   $6,649,345 
Long-term debt, less current maturities   3,547,267    3,781,607 
Other non-current liabilities   418,785    1,037,327 
Stockholders' equity   16,997,278    16,130,472 
           
Total Liabilities and Stockholders' Equity  $26,847,810   $27,598,751 

 

Consolidated Statements of Operations

   Three months ended December 31   Year ended December 31 
   2014   2013   2014   2013 
   (Unaudited)   (Unaudited)   (Unaudited)   (Audited) 
Product sales  $13,034,829   $16,082,933   $52,902,254   $62,379,450 
Handling & freight income   1,055,382    1,301,670    4,442,705    5,827,288 
                     
Net Sales   14,090,211    17,384,603    57,344,959    68,206,738 
                     
Costs and expenses:                    
  Cost of products sold   2,802,326    3,532,171    11,657,728    14,022,996 
  Distributor royalties and commissions   5,117,201    6,330,914    20,542,905    24,926,014 
  Selling, general and administrative   5,657,864    6,633,625    25,048,596    27,755,483 
                     
Total Costs and Expenses   13,577,391    16,496,710    57,249,229    66,704,493 
                     
Income from operations   512,820    887,893    95,730    1,502,245 
                     
Other income (expense):                    
Interest income   31,495    36,330    131,503    149,402 
Interest expense   (24,453)   (24,279)   (100,142)   (82,461)
Other income (expense)   (96,539)   (75,114)   (150,522)   (137,596)
                     
Income (loss) before income taxes   423,323    824,830    (23,431)   1,431,590 
Provision (benefit) for income taxes   (575,000)   322,000    (748,000)   655,000 
                     
Net income  $998,323   $502,830   $724,569   $776,590 
                     
                     
Earnings per common share - Basic  $0.08   $0.04   $0.06   $0.06 
Weighted average shares   12,667,000    12,624,000    12,666,000    12,619,000 
                     
Earnings per common share - Diluted  $0.08   $0.04   $0.06   $0.06 
Weighted average shares   12,730,000    12,875,000    12,811,000    12,816,000 
                     
Cash dividends declared per common share   -   $0.01    -   $0.03 

 

 
 

 

Reliv International, Inc. and Subsidiaries

ADD THREE

 

Net sales by Market

(in thousands)

   Three months ended December 31,   Change From 
   2014   2013   Prior Year 
   Amount   % of Net Sales   Amount   % of Net Sales   Amount   % 
                         
United States  $10,870    77.1%  $13,550    77.9%  $(2,680)   -19.8%
Australia/New Zealand   381    2.7%   457    2.6%   (76)   -16.6%
Canada   374    2.7%   466    2.7%   (92)   -19.7%
Mexico   189    1.3%   219    1.3%   (30)   -13.7%
Europe   1,772    12.6%   2,289    13.2%   (517)   -22.6%
Asia   504    3.6%   404    2.3%   100    24.8%
                               
Consolidated total  $14,090    100.0%  $17,385    100.0%  $(3,295)   -19.0%

 

Net sales by Market

(in thousands)

   Year ended December 31,   Change From 
   2014   2013   Prior Year 
   Amount   % of Net Sales   Amount   % of Net Sales   Amount   % 
                         
United States  $43,323    75.5%  $53,651    78.7%  $(10,328)   -19.3%
Australia/New Zealand   1,642    2.9%   1,859    2.7%   (217)   -11.7%
Canada   1,367    2.4%   1,777    2.6%   (410)   -23.1%
Mexico   796    1.4%   977    1.4%   (181)   -18.5%
Europe   8,301    14.5%   7,953    11.7%   348    4.4%
Asia   1,916    3.3%   1,990    2.9%   (74)   -3.7%
                               
Consolidated total  $57,345    100.0%  $68,207    100.0%  $(10,862)   -15.9%

The following table sets forth, as of December 31, 2014 and 2013, 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 his or her 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. For the December 31, 2014 and 2013 data, the active distributor count for Europe includes our preferred customers in France. This program began in mid-2013 and the Europe active distributor count as of 12/31/14 and 12/31/13 includes France preferred customers of 2,945 and 1,500, respectively.

 

Active Distributors and Master Affiliates and above by Market

   As of 12/31/2014   As of 12/31/2013   Change in % 
   Total
Active
Distributors		   Master
Affiliates and
Above		   Total
Active
Distributors		   Master
Affiliates and
Above		   Total
Active
Distributors		   Master
Affiliates
and Above		 
                         
United States   34,650    5,360    39,270    5,590    -11.8%   -4.1%
Australia/New Zealand   1,300    150    1,470    200    -11.6%   -25.0%
Canada   1,200    250    1,340    250    -10.4%   0.0%
Mexico   1,130    140    1,100    160    2.7%   -12.5%
Europe   7,640    890    6,790    940    12.5%   -5.3%
Asia   2,050    340    3,100    400    -33.9%   -15.0%
                               
Consolidated total   47,970    7,130    53,070    7,540    -9.6%   -5.4%

 

 


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