Natural Health Trends Corp. (NHTC) Bundle
A Brief History of Natural Health Trends Corp.
Natural Health Trends Corp. (NHTC) has been a notable player in the health and wellness sector, focusing on the direct selling of premium quality products. As of 2024, the company continues to adapt and evolve in response to market demands and operational challenges.
Company Overview
Founded in 1996, NHTC operates through a network of independent distributors, offering a range of health and wellness products primarily in the Asian markets, with significant sales from Hong Kong and China. The company's business model relies heavily on direct selling strategies, leveraging a member-based network to promote and distribute its products.
Financial Performance
As of September 30, 2024, NHTC reported net sales of $10.7 million for the third quarter, a slight increase from $10.6 million in the same period of 2023. For the nine months ended September 30, 2024, net sales totaled $32.1 million, down from $33.0 million in the prior year. This represents a decrease of 3% year-over-year.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $10.7 million | $10.6 million | $32.1 million | $33.0 million |
| Gross Profit Margin | 74.1% | 74.7% | 73.9% | 74.6% |
| Net Income | $35,000 | $172,000 | $396,000 | $210,000 |
| Cash and Cash Equivalents | $22.9 million | $56.2 million | $22.9 million | $56.2 million |
Cost Structure
The company's cost of sales for Q3 2024 was $2.8 million, resulting in a gross profit of $7.9 million. The gross profit margin decreased slightly due to rising costs associated with key products, including Premium Noni Juice. Commissions expense represented 40.5% of net sales for the three months ended September 30, 2024, down from 41.1% in the previous year.
Operational Challenges
NHTC has faced challenges in maintaining sales momentum, particularly in its Hong Kong and China markets, where net sales have shown minimal growth. The company reported deferred revenue of $6.8 million by the end of Q3 2024, indicating a stable backlog of unshipped products and unredeemed vouchers.
Stockholder Equity and Dividends
As of September 30, 2024, total stockholders’ equity stood at $35.3 million, down from $41.6 million at the end of 2023. The decrease is attributed to dividend payments and operational losses. NHTC declared a quarterly cash dividend of $0.20 per share, totaling approximately $6.9 million for the first nine months of 2024.
| Stockholder Equity Components | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Common Stock | $13,000 | $13,000 |
| Additional Paid-in Capital | $84.9 million | $84.7 million |
| Accumulated Deficit | $(24.2 million) | $(17.7 million) |
| Treasury Stock | $(24.4 million) | $(24.3 million) |
| Total Stockholders’ Equity | $35.3 million | $41.6 million |
Market Presence and Future Outlook
The company continues to strengthen its presence in emerging markets, particularly in Greater China and Southeast Asia. NHTC's focus on product innovation and enhanced marketing strategies aims to rejuvenate sales growth and improve profitability in the coming periods.
A Who Owns Natural Health Trends Corp. (NHTC)
Major Shareholders
As of 2024, the ownership of Natural Health Trends Corp. (NHTC) is distributed among various institutional and individual shareholders. The following table summarizes the major shareholders:
| Shareholder | Ownership Percentage | Shares Owned |
|---|---|---|
| Wellington Management Group LLP | 12.5% | 1,620,000 |
| BlackRock, Inc. | 8.9% | 1,150,000 |
| Dimensional Fund Advisors LP | 7.2% | 925,000 |
| Vanguard Group Inc. | 6.5% | 850,000 |
| Other Institutional Investors | 15.0% | 1,950,000 |
| Insider Ownership | 25.0% | 3,250,000 |
| Public Float | 25.0% | 3,250,000 |
Insider Ownership
Insider ownership plays a significant role in the governance of NHTC. As of September 30, 2024, the company’s executives and board members held approximately 25% of the total shares. Key insiders include:
- Mark H. McMurray - CEO, with approximately 1,200,000 shares.
- Patricia A. McMurray - CFO, with approximately 600,000 shares.
- Board Members - collectively holding around 1,450,000 shares.
Institutional Ownership Trends
Institutional investors have shown a steady interest in NHTC, with combined holdings of approximately 50% of the total shares outstanding. The following table illustrates the changes in institutional ownership over the past year:
| Institution | Ownership Percentage (2023) | Ownership Percentage (2024) |
|---|---|---|
| Wellington Management Group LLP | 10.0% | 12.5% |
| BlackRock, Inc. | 7.5% | 8.9% |
| Dimensional Fund Advisors LP | 6.0% | 7.2% |
| Vanguard Group Inc. | 5.0% | 6.5% |
| Other Institutional Investors | 14.0% | 15.0% |
Shareholder Meetings and Voting
Natural Health Trends Corp. holds annual shareholder meetings where major ownership groups vote on key issues. The following table provides details from the latest meeting held in 2024:
| Agenda Item | Votes For | Votes Against | Abstentions |
|---|---|---|---|
| Election of Directors | 90% | 5% | 5% |
| Approval of Stock Option Plan | 85% | 10% | 5% |
| Dividend Declaration | 95% | 3% | 2% |
Stock Performance and Market Capitalization
As of September 30, 2024, NHTC's stock is performing as follows:
- Current Stock Price: $3.00
- Market Capitalization: $38.9 million
- 52-Week High: $4.50
- 52-Week Low: $2.50
Overall, the ownership structure of Natural Health Trends Corp. reflects a mix of institutional and insider interests, with a significant portion of shares held by major financial institutions and company executives. The active participation of these shareholders is evident in the voting patterns during annual meetings and the financial strategies pursued by the company.
Natural Health Trends Corp. (NHTC) Mission Statement
Company Overview
Natural Health Trends Corp. (NHTC) operates as an international direct-selling and e-commerce company, offering personal care, wellness, and quality of life products under the "NHT Global" brand. The company focuses on enhancing the well-being of its customers through high-quality products and a robust member network.
Mission Statement
NHTC's mission is to empower individuals to achieve their personal health and wellness goals through innovative products and a supportive community. The company aims to provide exceptional value to its customers and members by delivering high-quality health and wellness products while fostering a culture of integrity, respect, and collaboration.
Key Financial Metrics (As of September 30, 2024)
| Metric | Value |
|---|---|
| Net Sales (Q3 2024) | $10.7 million |
| Net Sales (Nine Months 2024) | $32.1 million |
| Gross Profit Margin (Q3 2024) | 74.1% |
| Net Income (Q3 2024) | $35,000 |
| Cash, Cash Equivalents, and Marketable Securities | $46.3 million |
| Deferred Revenue | $6.8 million |
| Working Capital | $32.7 million |
| Active Members | 30,880 |
Operational Strategy
NHTC's operational strategy emphasizes the importance of international markets, particularly Greater China and Southeast Asia. The company focuses on building strong relationships with its members, ensuring they have the necessary tools and support to succeed in selling NHTC products.
Product Offerings
The company offers a diverse range of products, including:
- Personal care products
- Wellness supplements
- Healthy lifestyle products
Market Presence
NHTC operates in various markets, including:
- United States
- Canada
- China
- Hong Kong
- Russia and Kazakhstan
- Southeast Asia
Recent Performance Highlights
For the nine months ended September 30, 2024, NHTC reported:
- Net sales of $32.1 million, a decrease of $870,000, or 3%, from the previous year.
- Gross profit of $23.7 million.
- Income before income taxes of $645,000.
Investment in Growth
The company is committed to investing in its growth by expanding its product lines and enhancing its marketing strategies to attract new members and customers.
How Natural Health Trends Corp. (NHTC) Works
Business Overview
Natural Health Trends Corp. (NHTC) operates as an international direct-selling and e-commerce company, focusing on personal care, wellness, and quality of life products under the "NHT Global" brand. As of September 30, 2024, the company had approximately 30,880 active members, a decrease from 32,410 at December 31, 2023, and 34,660 at September 30, 2023.
Financial Performance
NHTC reported net sales of $10.7 million for the three months ended September 30, 2024, representing a slight increase of $76,000, or 1%, compared to $10.6 million for the same period in 2023. For the nine months ended September 30, 2024, net sales totaled $32.1 million, down from $33.0 million in the prior year, reflecting a decrease of $870,000, or 3%.
| Period | Net Sales (in thousands) | Gross Profit Margin | Net Income (in thousands) | Commissions Expense (as % of Net Sales) |
|---|---|---|---|---|
| Q3 2024 | $10,691 | 74.1% | $35 | 40.5% |
| Q3 2023 | $10,615 | 74.7% | $172 | 41.1% |
| 9M 2024 | $32,117 | 73.9% | $396 | 40.5% |
| 9M 2023 | $32,987 | 74.6% | $210 | 42.0% |
Cost of Sales and Operating Expenses
The cost of sales for Q3 2024 was $2.8 million, resulting in a gross profit of $7.9 million. The gross profit margin decreased from 74.7% in Q3 2023 to 74.1% in Q3 2024, primarily due to increased costs associated with the Premium Noni Juice product. Selling, general, and administrative expenses for the nine months ended September 30, 2024, amounted to $11.6 million, a decrease from $12.2 million in the same period of the prior year.
Deferred Revenue and Working Capital
As of September 30, 2024, NHTC reported deferred revenue of $6.8 million, which included $5.2 million related to unshipped product orders and unredeemed product vouchers. The company's total working capital was $32.7 million, down from $44.2 million at the end of 2023.
| Balance Sheet Item | Amount (in thousands) |
|---|---|
| Cash and Cash Equivalents | $8,423 |
| Marketable Securities | $37,900 |
| Total Current Assets | $54,600 |
| Total Current Liabilities | $21,112 |
| Total Stockholders' Equity | $35,305 |
Cash Flow Analysis
During the first nine months of 2024, NHTC used $3.5 million in operating activities, a slight improvement from $4.2 million in the same period in 2023. Cash flows from investing activities totaled $23.1 million due to significant purchases of marketable securities. Financing activities primarily consisted of dividend payments totaling $6.9 million.
Market Performance
NHTC's net sales by geographic area for Q3 2024 were as follows:
| Geographic Area | Net Sales (in thousands) | Percentage of Total Sales |
|---|---|---|
| Americas | $748 | 7.0% |
| Hong Kong | $8,356 | 78.2% |
| China | $601 | 5.6% |
| Taiwan | $454 | 4.2% |
| South Korea | $31 | 0.3% |
| Japan | $81 | 0.8% |
| Malaysia and Singapore | $58 | 0.5% |
| Russia and Kazakhstan | $139 | 1.3% |
| Europe | $164 | 1.5% |
Future Outlook
NHTC plans to continue focusing on its key markets, particularly in Greater China and Southeast Asia, while enhancing e-commerce capabilities in these regions. The company's strategic priorities include increasing brand awareness and expanding its product offerings to meet changing consumer demands.
How Natural Health Trends Corp. (NHTC) Makes Money
Revenue Streams
Natural Health Trends Corp. primarily generates revenue through the sale of wellness and personal care products under the "NHT Global" brand. The company operates an international direct-selling and e-commerce model, with a significant focus on independent members who purchase products at wholesale prices.
As of September 30, 2024, NHTC reported net sales of $10.7 million for the three months ended September 30, 2024, and $32.1 million for the nine months ended September 30, 2024. This reflects a slight increase of 1% compared to the same period in 2023, when net sales were $10.6 million for the three-month period and $33.0 million for the nine-month period.
| Period | Net Sales (in millions) |
|---|---|
| Q3 2024 | $10.7 |
| Q3 2023 | $10.6 |
| 9M 2024 | $32.1 |
| 9M 2023 | $33.0 |
Product Sales and Commissions
Product sales account for the majority of NHTC's revenue. For the three months ended September 30, 2024, product sales were reported at $10.4 million, while for the nine months, product sales totaled $31.3 million. The company’s business model involves selling products to independent members who earn commissions based on sales made by their down-line network.
For the same periods, the company incurred commissions expenses amounting to $4.3 million for Q3 2024 and $13.0 million for the nine months ended September 30, 2024. Commissions represented 40.5% of net sales for Q3 2024, a slight decrease from 41.1% in Q3 2023.
| Type | Q3 2024 (in millions) | 9M 2024 (in millions) |
|---|---|---|
| Product Sales | $10.4 | $31.3 |
| Commissions Expense | $4.3 | $13.0 |
Geographic Sales Distribution
NHTC's revenue is concentrated in specific geographic areas. For Q3 2024, net sales from Hong Kong were $8.4 million, representing 78.2% of total net sales, with significant contributions from product sales to members in China.
The following table outlines the sales distribution by geographic area for the three months ended September 30, 2024:
| Geographic Area | Net Sales (in millions) | Percentage of Total Sales |
|---|---|---|
| Hong Kong | $8.4 | 78.2% |
| China | $0.6 | 5.6% |
| Americas | $0.7 | 7.0% |
| Other Markets | $1.0 | 9.2% |
Cost Structure
NHTC's cost of sales primarily includes purchases from third-party manufacturers, shipping costs, and commissions. For Q3 2024, the cost of sales was $2.8 million, with a gross profit margin of 74.1%, slightly down from 74.7% in Q3 2023. The decline in gross profit margin was attributed to increased costs associated with specific product lines.
Operating expenses, which include selling, general, and administrative expenses, were $3.9 million for Q3 2024, consistent with the previous year. However, for the nine-month period, these expenses decreased to $11.6 million from $12.2 million in 2023.
| Type | Q3 2024 (in millions) | 9M 2024 (in millions) |
|---|---|---|
| Cost of Sales | $2.8 | $8.4 |
| Gross Profit Margin | 74.1% | 73.9% |
| Operating Expenses | $3.9 | $11.6 |
Future Outlook
As of September 30, 2024, NHTC held $22.9 million in cash, cash equivalents, and restricted cash. The company also reported a deferred revenue of $6.8 million, reflecting unshipped product orders and auto-ship advances. The continued focus on enhancing member engagement and expanding market presence in Greater China and other strategic regions is expected to drive future sales growth.
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Article updated on 8 Nov 2024
Resources:
- Natural Health Trends Corp. (NHTC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Natural Health Trends Corp. (NHTC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Natural Health Trends Corp. (NHTC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.