Natural Health Trends Corp (NHTC) 2023 Q3 法說會逐字稿

Greetings. Welcome to Natural Health Trends Corp third-quarter 2023 earnings conference call. (Operator Instructions) Please note this conference is being recorded.

問候。歡迎參加 Natural Health Trends Corp 2023 年第三季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to Michelle Glidewell with Natural Health Trends Corp. Thank you. You may begin.

我現在將會議交給 Natural Health Trends Corp 的 Michelle Glidewell。謝謝。你可以開始了。

Thank you and welcome to Natural Health Trends third-quarter 2023 earnings conference call.

感謝並歡迎參加自然健康趨勢 2023 年第三季財報電話會議。

During today's call, there may be statements made relating to the future results of the company that are forward-looking statements as assigned in the Private Securities Litigation Reform Act of 1995. Actual results, performance, or achievements could differ materially from those anticipated in such forward-looking statements or as a results of certain factors, including those set forth in the company's filings with the Securities and Exchange Commission.

在今天的電話會議中，可能會做出與公司未來業績相關的陳述，這些陳述屬於1995 年《私人證券訴訟改革法案》中規定的前瞻性陳述。實際結果、業績或成就可能與此類預期存在重大差異。前瞻性陳述或某些因素的結果，包括公司向美國證券交易委員會提交的文件中列出的因素。

It should also be noted that today's call will be webcast live and can be found on the investor section of the company's corporate at website naturalhealthtrendscorp.com. Instructions for accessing the archived version of the conference call can be found at today's financial results press release, which was issued at approximately 9:00 AM Eastern Time.

還應該指出的是，今天的電話會議將進行網路直播，並且可以在該公司網站naturalhealthtrendscorp.com的投資者部分找到。有關存取電話會議存檔版本的說明，請參閱今天的財務業績新聞稿，該新聞稿於東部時間上午 9:00 左右發布。

At this time, I'd like to turn the call over to Chris Sharng, President of Natural Health Trends.

現在，我想將電話轉交給自然健康趨勢總裁 Chris Sharng。

Thank you, Michelle, and thanks to everyone for joining us this morning to discuss our third-quarter 2023 financial results. With me today is Scott Davidson, our Senior Vice President and Chief Financial Officer.

謝謝米歇爾，也謝謝大家今天早上加入我們討論我們的 2023 年第三季財務業績。今天與我在一起的是我們的高級副總裁兼財務長 Scott Davidson。

For the quarter, we generated revenue of $10.6 million, a decrease of 9% compared to the third quarter of 2022. The decrease was largely accounted for by changes in deferred revenue as orders were received later in the quarter this year. Our business is adapting to the economic landscape where Chinese consumers are reluctant to spend or invest and where overall consumer sentiment is terrific.

本季我們的營收為 1,060 萬美元，與 2022 年第三季相比下降了 9%。這一下降主要是由於今年第三季稍後收到訂單而導致的遞延收入變化所致。我們的業務正在適應中國消費者不願消費或投資且整體消費者情緒非常好的經濟狀況。

Yet despite this environment, we are pleased to see that orders taken during the period were roughly flat, even with continued headwinds of a stronger US dollar. Q3 2023 orders compared to Q3 2022 had a constant exchange rate grew by 3%, while year-to-date 2023 orders compared to the same period last year increased 8%.

然而，儘管存在這種環境，我們很高興地看到，儘管美元走強的持續阻力，但在此期間收到的訂單大致持平。 2023 年第三季訂單與 2022 年第三季相比，以固定匯率計算成長了 3%，而 2023 年年初至今的訂單與去年同期相比成長了 8%。

The fact that our members remain responsive to our programs is a positive indicator that the promotions, incentives, and our high quality product offerings continue to resonate and make an impact. In China and Hong Kong, our members participated in local gatherings and training events to engage and attract customers and to further develop skills such as improved product knowledge and leadership development. We look forward to an upcoming event in this month and the launch of our newest product, [Relaxer Pro], a supplement designed to help reduce stress and promote calmness. The product is formulated with clinically proven ashwagandha and other relaxation-inducing ingredients such as lemon balm and magnesium.

我們的會員對我們的計劃保持積極響應這一事實是一個積極的跡象，表明促銷、激勵措施和我們的高品質產品繼續產生共鳴並產生影響。在中國大陸和香港，我們的會員參加了當地的聚會和培訓活動，以吸引和吸引客戶，並進一步發展技能，例如提高產品知識和領導力發展。我們期待本月即將舉行的活動以及我們最新產品 [Relaxer Pro] 的推出，這是一種旨在幫助減輕壓力和促進平靜的補充劑。本產品採用經過臨床驗證的南非醉茄和其他放鬆誘導成分（如檸檬香脂和鎂）配製而成。

Turning our focus outside of China and Hong Kong. Several of our other markets delivered strong third-quarter performances, mainly Taiwan, Peru, North America, and Japan. Each of these markets achieved an increase in orders taken at a constant exchange rate compared to prior year. Growth was primarily driven through the combination of online training and in person events paired with product promotions and incentive qualifications. Successfully reengaging members in our worldwide activities helps create excitement and momentum around our business model and high impact product offerings.

將我們的注意力轉向中國和香港以外。我們的其他幾個市場第三季表現強勁，主要是台灣、秘魯、北美和日本。與去年相比，這些市場中以固定匯率計算的訂單量均有所增加。成長主要是透過線上培訓和現場活動以及產品促銷和激勵資格相結合來推動的。成功地讓會員重新參與我們的全球活動有助於為我們的商業模式和高影響力的產品創造興奮和動力。

In Latin America, we are getting closer to launch our business in Colombia in the fourth quarter and will continue to progress the necessary regulatory requirements to operate in Bolivia. We steadily made progress on our digital enhancement initiatives that we believe will be a key driver for future growth by enhancing member productivity and improving the overall shopping experience with us. We look forward to where we can roll out these developments to our members and customers.

在拉丁美洲，我們即將於第四季在哥倫比亞開展業務，並將繼續推進在玻利維亞開展業務所需的監管要求。我們的數位增強計劃穩步取得進展，我們相信這些計劃將透過提高會員生產力和改善整體購物體驗而成為未來成長的關鍵驅動力。我們期待著能夠向我們的會員和客戶推出這些開發成果。

I'd like to thank our loyal members who remain committed to our products and to helping others achieve improved health and Wellness through our product lines as well. Their ability to rise to the challenging economic environment speaks volumes about their perseverance and passion for our mission. We will continue to focus on careful planning and execution of our strategic key initiatives, including digital improvements, new product introductions, and the delivery of exceptional support.

我要感謝我們的忠實會員，他們仍然致力於我們的產品，並透過我們的產品線幫助他人改善健康。他們應對充滿挑戰的經濟環境的能力充分說明了他們對我們使命的堅持和熱情。我們將繼續專注於仔細規劃和執行我們的策略關鍵舉措，包括數位化改進、新產品推出以及提供卓越的支援。

With that, I'd like to turn the call over to our CFO, Scott Davidson, to discuss our financial results in greater detail. Scott?

說到這裡，我想將電話轉給我們的財務長史考特戴維森，更詳細地討論我們的財務表現。史考特？

Thank you, Chris. Total revenue for the third quarter was $10.6 million, a decrease of 9% compared to $11.7 million in the third quarter of 2022. As Chris stated, the decrease was largely accounted for by the changes in deferred revenue as orders were received later in the quarter of this year.

謝謝你，克里斯。第三季的總收入為1,060 萬美元，與2022 年第三季的1,170 萬美元相比下降了9%。正如Chris 所說，下降的主要原因是本季稍後收到訂單導致的遞延收入變化今年的。

Deferred revenue decreased $603,000 during the third quarter of this year as compared to $1.4 million in the third quarter last year, resulting in an $835,000 unfavorable revenue variance. Our active member base decreased 6% to 34,660 at September 30 from 36,730 at June 30, and was down 16% from 41,170 at September 30 last year.

今年第三季遞延收入減少了 603,000 美元，而去年第三季為 140 萬美元，導致收入差異達 83.5 萬美元。我們的活躍會員數量從 6 月 30 日的 36,730 人減少至 9 月 30 日的 34,660 人，比去年 9 月 30 日的 41,170 人減少 16%。

Turning to our cost and operating expenses. Gross profit margin of 74.7%, improved slightly from 73.6% in the third quarter of last year due to lower logistics costs. Commissions expense as a percent of total revenue for the third quarter was 41.1% compared to 41.5% in the prior year quarter. Selling, general, and administrative expenses for the quarter were $3.9 million flat compared to a year ago.

轉向我們的成本和營運費用。由於物流成本下降，毛利率為74.7%，較去年第三季的73.6%略有改善。第三季佣金支出佔總收入的百分比為 41.1%，而去年同期為 41.5%。本季的銷售、一般和管理費用為 390 萬美元，與去年同期持平。

As a result, operating loss for the quarter was $292,000 compared to $145,000 in the third quarter of last year. We recorded an income tax provision of $121,000 for the quarter compared to an income tax benefit of $5,000 in the third quarter last year. Net income for the third quarter totaled $172,000 or $0.02 per diluted share, compared to $47,000 or break even per diluted share in the third quarter of 2022.

因此，本季營業虧損為 29.2 萬美元，而去年第三季為 14.5 萬美元。我們本季的所得稅撥備為 121,000 美元，而去年第三季的所得稅優惠為 5,000 美元。第三季淨利總計 172,000 美元，即每股攤薄收益 0.02 美元，而 2022 年第三季淨利為 47,000 美元，即每股攤薄收益持平。

Now, I'll turn to our balance sheet and cash flow. Total cash and cash equivalents were $58.4 million at September 30, down from $61.6 million at June 30. Net cash used in operating activities was $869,000 in the third quarter compared to $2.3 million in the third quarter of last year.

現在，我將轉向我們的資產負債表和現金流。截至9 月30 日，現金及現金等價物總額為5,840 萬美元，低於6 月30 日的6,160 萬美元。第三季經營活動使用的現金淨額為869,000 美元，而去年第三季為230 萬美元。

As returning capital to our stockholders remains a top priority, I'm pleased to announce that on October 30, our Board of Directors declared another quarterly cash dividend of $0.20 per share which would be payable on November 24 to stockholders of record as of November 14.

由於向股東返還資本仍然是我們的首要任務，我很高興地宣布，10 月30 日，我們的董事會宣布另一次每股0.20 美元的季度現金股息，將於11 月24 日支付給截至11 月14日在冊的股東。

As we adjust to the everchanging business environment, we continue to carefully devise and implement programs to improve performance and productivity. Our focus remains on returning to a period of growth through execution of our strategies to boost topline revenue and ultimately deliver shareholder value.

當我們適應不斷變化的商業環境時，我們繼續仔細設計和實施計劃以提高績效和生產力。我們的重點仍然是透過執行我們的策略來恢復成長時期，以提高營收並最終實現股東價值。

That completes our prepared remarks. I will now turn the call back over to the operator.

我們準備好的發言就到此結束了。我現在將把電話轉回給接線生。

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路，感謝您的參與。