8-K

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

February 9, 2022

Date of Report (Date of earliest event reported)

NATURAL HEALTH TRENDS CORP.

(Exact name of registrant as specified in its charter)

Delaware	001-36849	59-2705336
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Units 1205-07, 12F, Mira Place Tower A, 132 Nathan Road, Tsimshatsui, Kowloon, Hong Kong

(Address of principal executive offices, including zip code)

+852-3107-0800

(Registrant’s telephone number, including area code)

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐   Emerging growth company

☐    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Exchange Act:

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

Item 2.02 Results of Operations and Financial Condition.

On February 9, 2022, Natural Health Trends Corp. issued an earnings release announcing its results for the quarter and year ended December 31, 2021. The press release is attached hereto as exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits.
	99.1        Press Release of Natural Health Trends Corp. dated February 9, 2022
	104        Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 9, 2022

NATURAL HEALTH TRENDS CORP.
By:	/s/ Timothy S. Davidson
	Timothy S. Davidson
	Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Natural Health Trends Reports Fourth Quarter and Full Year 2021 Financial Results

– Fourth quarter revenue of $16.1 million increased 13% compared to the third quarter of 2021 

– Seventh consecutive quarter of positive operating income and net income

– Generated positive cash flow from operations in the fourth quarter and full year of 2021

– Declared a quarterly cash dividend of $0.20 per share 

HONG KONG – February 9, 2022 – Natural Health Trends Corp. (NASDAQ: NHTC), a leading direct-selling and e-commerce company that markets premium quality personal care, wellness and “quality of life” products under the NHT Global brand, today announced its financial results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights

• Revenue of $16.1 million increased 13% compared to $14.3 million in the third quarter of 2021 and decreased 3% compared to $16.6 million in the fourth quarter of 2020. 

• Operating income was $487,000 compared to $479,000 in the third quarter of 2021 and $1.3 million in the fourth quarter of 2020.

• Net income was $232,000, or $0.02 per diluted share, compared to $471,000, or $0.04 per diluted share, in the third quarter of 2021 and $747,000, or $0.07 per diluted share, in the fourth quarter of 2020.

• The number of Active Members¹ were down slightly to 45,760 at December 31, 2021, compared to 45,950 at September 30, 2021, and decreased 12% compared to 52,230 at December 31, 2020.

¹  Natural Health Trends defines Active Members as those that have placed at least one product order with the Company during the preceding twelve-month period.

Full Year 2021 Financial Highlights

• Revenue of $60.0 million decreased 3% compared to $62.1 million in 2020.

• Operating income was $1.6 million compared to $669,000 in 2020.

• Net income was $1.1 million, or $0.09 per diluted share, compared to $843,000, or $0.07 per diluted share, in 2020.

Management Commentary

“We were pleased to report fourth quarter revenue of $16.1 million, an increase of 13% over the third quarter of 2021,” commented Chris Sharng, President of Natural Health Trends Corp. “The top-line improvement reflected double-digit growth in order volume given our increased ability to adapt to the ever-changing macroeconomic environment resulting from the pandemic. The increase in order volume resulted in our deferred revenue balance growing by $2.5 million from September 30 to December 31, 2021. Additionally, we reported our seventh consecutive quarter of positive operating income and net income.”

Mr. Sharng continued, “As we look ahead into 2022, the effects of the COVID-19 pandemic, and the associated government-mandated restrictions and lockdowns, will likely continue to present headwinds to our business. However, we believe we can continue to support our order volume due to the unwavering hard work and dedication of our employees, leaders and members, coupled with our ability to quickly respond and adapt to changing market conditions. We are guardedly optimistic we will benefit from a gradual resumption of in-person member events and activities going forward.”

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Balance Sheet and Cash Flow

• Net cash provided by operating activities was $1.0 million in 2021 compared to $1.9 million in 2020.

• Total cash and cash equivalents were $83.8 million as of December 31, 2021, down from $92.4 million as of December 31, 2020. 

• On February 7, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on March 4, 2022 to stockholders of record as of February 22, 2022.

The Company expects to issue its 2021 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2021 audited financial results.

Fourth Quarter and Full Year 2021 Financial Results Conference Call

Management will host a conference call to discuss the fourth quarter and full year 2021 financial results today, Wednesday, February 9, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

Date:	Wednesday, February 9, 2022
Time:	11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time
Dial-in:	1-877-407-0789 (Domestic) 1-201-689-8562 (International)
Conference ID:	13726094
Webcast:	https://viavid.webcasts.com/starthere.jsp?ei=1522631&tp_key=580f9875a9

For those unable to participate during the live broadcast, a replay of the call will also be available from 2:30 p.m. Eastern Time on February 9, 2022 through 11:59 p.m. Eastern Time on February 23, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number:  13726094.

About Natural Health Trends Corp.

Natural Health Trends Corp. (NASDAQ: NHTC) is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, the Americas, and Europe. The Company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the Company’s website at www.naturalhealthtrendscorp.com.

Forward-Looking Statements

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this press release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption “Risk Factors” in Natural Health Trends Corp.’s Annual Report on Form 10-K filed on February 26, 2021 with the Securities and Exchange Commission (SEC), as well as in subsequent reports filed this year with the SEC. The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

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CONTACTS:

Company Contact:

Scott Davidson

Senior Vice President and Chief Financial Officer

Natural Health Trends Corp.

Tel (Hong Kong): +852-3107-0800

Tel (U.S.): 310-541-0888

scott.davidson@nhtglobal.com

Investor Contact:

ADDO Investor Relations

Tel: 310-829-5400

investor.relations@nhtglobal.com

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NATURAL HEALTH TRENDS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 

	December 31,
	2021			2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	83,843		$	92,367
Inventories		5,257			3,779
Other current assets		4,369			3,595
Total current assets		93,469			99,741
Property and equipment, net		463			539
Operating lease right-of-use assets		3,021			3,745
Restricted cash		522			525
Deferred tax asset		309			731
Other assets		571			661
Total assets	$	98,355		$	105,942
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	761		$	580
Income taxes payable		1,345			1,481
Accrued commissions		3,636			3,496
Other accrued expenses		1,933			1,922
Deferred revenue		8,536			3,091
Amounts held in eWallets		6,341			8,503
Operating lease liabilities		1,239			1,163
Other current liabilities		865			1,270
Total current liabilities		24,656			21,506
Income taxes payable		12,130			13,748
Deferred tax liability		153			216
Operating lease liabilities		1,928			2,775
Total liabilities		38,867			38,245
Stockholders’ equity:
Preferred stock		—			—
Common stock		13			13
Additional paid-in capital		86,102			86,102
Retained earnings (accumulated deficit)		(231	)		7,822
Accumulated other comprehensive loss		(492	)		(336	)
Treasury stock, at cost		(25,904	)		(25,904	)
Total stockholders’ equity		59,488			67,697
Total liabilities and stockholders’ equity	$	98,355		$	105,942

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NATURAL HEALTH TRENDS CORP. 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended December 31,				Year Ended December 31,
	2021		2020		2021			2020
	(Unaudited)				(Unaudited)
Net sales	$	16,108	$	16,595	$	60,005		$	62,071
Cost of sales		4,153		4,024		15,010			16,990
Gross profit		11,955		12,571		44,995			45,081
Operating expenses:
Commissions expense		7,110		6,868		25,578			26,204
Selling, general and administrative expenses		4,358		4,437		17,846			18,208
Total operating expenses		11,468		11,305		43,424			44,412
Income from operations		487		1,266		1,571			669
Other income (expense), net		31		218		(61	)		821
Income before income taxes		518		1,484		1,510			1,490
Income tax provision		286		737		425			647
Net income	$	232	$	747	$	1,085		$	843
Net income per common share:
Basic	$	0.02	$	0.07	$	0.10		$	0.08
Diluted	$	0.02	$	0.07	$	0.09		$	0.07
Weighted-average number of common shares outstanding:
Basic		11,159		10,777		11,017			10,630
Diluted		11,424		11,424		11,424			11,424

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NATURAL HEALTH TRENDS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:		(Unaudited)
Net income	$	1,085		$	843
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		299			410
Noncash lease expense		1,163			1,532
Deferred income taxes		362			1,339
Changes in assets and liabilities:
Inventories		(1,547	)		2,700
Other current assets		(803	)		2,322
Other assets		68			181
Accounts payable		182			(102	)
Income taxes payable		(1,753	)		(311	)
Accrued commissions		212			566
Other accrued expenses		20			(471	)
Deferred revenue		5,482			(1,433	)
Amounts held in eWallets		(2,122	)		(4,491	)
Operating lease liabilities		(1,237	)		(1,427	)
Other current liabilities		(395	)		227
Net cash provided by operating activities		1,016			1,885
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(225	)		(211	)
Net cash used in investing activities		(225	)		(211	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid		(9,138	)		(9,138	)
Net cash used in financing activities		(9,138	)		(9,138	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(180	)		931
Net decrease in cash, cash equivalents and restricted cash		(8,527	)		(6,533	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		92,892			99,425
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	84,365		$	92,892
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
Right-of-use assets obtained in exchange for operating lease liabilities	$	472		$	2,747

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XML

Document And Entity Information	Feb. 09, 2022
Document Information [Line Items]
Entity, Registrant Name	NATURAL HEALTH TRENDS CORP.
Document, Type	8-K
Document, Period End Date	Feb. 09, 2022
Entity, Incorporation, State or Country Code	DE
Entity, File Number	001-36849
Entity, Tax Identification Number	59-2705336
Entity, Address, Address Line One	Units 1205-07, 12F, Mira Place Tower A
Entity, Address, Address Line Two	132 Nathan Road
Entity, Address, Address Line Three	Tsimshatsui
Entity, Address, City or Town	Kowloon
Entity, Address, Country	HK
City Area Code	852
Local Phone Number	3107-0800
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	NHTC
Security Exchange Name	NASDAQ
Amendment Flag	false
Entity, Central Index Key	0000912061