CHESTERFIELD, Mo., Aug 1, 2007 (PrimeNewswire via COMTEX) -- Reliv International, Inc. (RELV) , maker of a proprietary line of nutritional supplements, today reported net sales for the second quarter totaled $26.3 million, representing a 5.5 percent decline compared to the second quarter last year.
In the United States, second-quarter net sales were $23.3 million, down 7.0 percent compared to the second quarter 2006. International net sales rose to $3.0 million for the quarter, up 8.4 percent vs. the same quarter of 2006.
Net income for the quarter equaled $823,000, or $0.05 per diluted share, down 44 percent from the second quarter of 2006.
The number of new distributors increased 7 percent during the second quarter compared to the same quarter last year. This is the third straight quarter of increases in the number of new distributors, reflecting a strategy to focus on distributor growth.
"We are disappointed in our second-quarter performance," said Robert L. Montgomery, chairman, president and chief executive officer. "While we are pleased to see our distributor growth strategy take root as evidenced by an increase in our total distributor count, a smaller percentage of the new distributors are joining at the Master Affiliate level when compared to a year ago. This translates into a drop in the average size of initial orders," he said.
"We believe the resulting sales lag is temporary as we teach our newest distributors to build their business to the Master Affiliate level. Our new basic training addresses this issue, and we'll emphasize it at our International Conference next week. We remain confident that this long-term strategy will serve us well," Montgomery said.
"At the International Conference, we'll also introduce a new sales promotion with great potential to increase sales," he said.
Profit margins in the quarter were negatively affected by higher selling, general and administrative expenses.
"We are actively looking at additional ways to reduce costs," Montgomery said. "For instance, we are holding one fewer regional conference in the second half of 2007 than in the same period in 2006."
Reliv also should benefit in the last half of 2007 from the elimination of some costs faced in the second quarter that were not present in the year-ago quarter. Those included expenses for the Mega-Bonus program and the upcoming trip to Germany for top distributors.
For the first six months of 2007, Reliv reported an increase in net sales and sponsorship compared to the first half of 2006. Net sales rose 3.8 percent compared to the first half of last year, and sponsorship numbers for the first half increased 19.9 percent. In addition, sales outside of the United States increased 11.5 percent to $6.1 million.
Net income for the first half of 2007, however, decreased 15.4 percent to $3.4 million.
Reliv will host a conference call to discuss the second quarter 2007 earnings with investors at 1:00 p.m. Eastern Time on August 1, 2007. The dial-in number for investors is 800-599-9795. The participant passcode is 33968585. To register, please call in 15 minutes prior to start of the call. A replay of this call will be available for one week by telephone from 3:00 p.m. Eastern by calling 888-286-8010 and using the passcode 26109342. A live web cast of this call will be available through the Investor Relations section of Reliv's Web site, http://www.reliv.com/us/investor. An online archive of the broadcast will be available on Reliv's Web site in the Investor Relations section 24 hours after the call concludes.
Reliv International, Inc., based in suburban St. Louis, Mo., develops, manufactures and markets a proprietary line of nutritional supplements addressing basic nutrition, specific wellness needs, weight management and sports nutrition. Reliv sells its products through an international network marketing system of approximately 69,000 independent distributors. Additional information about Reliv International, Inc. can be obtained on the Web at http://www.reliv.com.
Statements made in this 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 Reliv's web site, http://www.reliv.com.