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Natural Health Trends Corp. Reports Strong Growth in Sales and Earnings for Second Quarter; Operating Income and Net Income More Than Double

DALLAS--(BUSINESS WIRE)--Aug. 14, 2003--Natural Health Trends Corp. (OTC BB: NHLC), an international direct-selling company, announced today its financial results for the second quarter and six months ended June 30, 2003.

Net sales for the quarter rose by 33% to $12.16 million from $9.12 million in the second quarter of 2002. The increased sales were primarily from additional sales of Lexxus products and the expansion of Lexxus into new international markets, including the launch of Lexxus into South Korea in June 2003. Second quarter 2003 gross profit climbed to $10.48 million from $7.54 million in the second quarter of 2002.

Increased sales, as well as efficient cost containment efforts, were the factors that strengthened the Company's second quarter financial earnings. The second quarter of 2003 featured operating income of $1.52 million, which was a substantial increase over the results in the same quarter of 2002 of $0.65 million. Net income for the quarter rose to $1.32 million, or $0.28 per basic share and $0.23 per diluted share, from $0.66 million, or $0.22 per basic share and $0.17 per diluted share for the same period in 2002.

Mark Woodburn, President of Natural Health Trends Corp., stated, "We are pleased with the results for the second quarter and for the six months of 2003. Our expansion outside the United States is proceeding according to plan, and our higher sales figures speak clearly for themselves. We anticipate the second half of the year to build on these results."

Net sales for the six months ended June 30, 2003 climbed to $21.80 million from $15.27 million in the first six months of 2002. Gross profit in the first half of 2003 reached $18.18 million versus $12.61 million for the same period 2002.

Operating income for the six months ended June 30, 2003 more than tripled to $2.28 million from $0.52 million in the same period prior year. Net income for the first half of 2003 also more than tripled to $2.29 million, or $0.50 per basic share and $0.41 per diluted share, from $0.67 million in same period prior year, or $0.22 per basic share and $0.18 per diluted share.

Mr. Woodburn said, "We continue to sell proven products, which are met with vast customer approval, while penetrating existing markets with our sales and marketing strengths and capabilities. Additionally, our international expansion efforts are continuing, and we are currently doing business in 30 countries around the world."

Mr. Woodburn observed, "The South Korean market, where we have just started operations, represents huge growth potential. The World Federation of Direct Selling Associations says that South Korea is the third largest market in the world for direct sales, with sales in excess of $2.9 billion annually. Even a small market share will translate into significant sales, and we have more than sufficient interest to make an early success of South Korea."

He also said, "Natural Health Trends Corp. has applied for listing on the American Stock Exchange, and we are optimistic that the process should be completed soon. We are looking forward to enhanced visibility among investors as a result of the listing. We expect the American Stock Exchange listing to bring greater trading volume and liquidity."

Natural Health Trends Corp. is an international direct-selling company operating in more than 30 markets throughout Asia, North America and Eastern Europe. The Company markets premium quality personal care products under the Lexxus brand and markets its nutritional supplement products under the Kaire brand. Additional information can be found on the Company's website,, and management encourages interested parties to register for updated corporate information via e-mail on the Company's homepage.

Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates," "will," or "plans" to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.

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