Pure Well being Developments Corp. (NASDAQ:NHTC) Q3 2022 Earnings Convention Name November 2, 2022 11:30 AM ET
Michelle Glidewell – Senior Supervisor, NHT World Corp
Chris Sharng – President and Director
Scott Davidson – Senior VP and Chief Monetary Officer
Greetings, and welcome to the Pure Well being Developments Corp. Third Quarter 2022 Earnings Convention Name. [Operator Instructions] As a reminder, this convention is being recorded.
It’s now my pleasure to introduce your host, Michelle Glidewell with Pure Well being Developments Corp. Thanks, Michelle. You could start.
Thanks, and welcome to Pure Well being Developments Third Quarter 2022 Earnings Convention Name.
Throughout immediately’s name, there could also be statements made referring to the long run outcomes of the corporate which are forward-looking statements as outlined within the Personal Securities Litigation Reform Act of 1995. Precise outcomes, efficiency or achievements may differ materially from these anticipated in such forward-looking statements by the results of sure elements, together with these set forth within the firm’s filings with the Securities and Change Fee.
It must also be famous that immediately’s name shall be webcast reside and might be discovered on the Buyers part of the corporate’s company web site at naturalhealthtrendscorp.com. Directions might be discovered for accessing the archived model of the convention name in immediately’s monetary outcomes press launch, which was issued at roughly 9:00 a.m. Japanese time.
At the moment, I might like to show the decision over to Chris Sharng, President of Pure Well being Developments.
Thanks, Michelle, and due to everybody for becoming a member of us this morning to debate our third quarter 2022 monetary outcomes. With me immediately is Scott Davidson, our Senior Vice President and Chief Monetary Officer.
Within the third quarter, outcomes have been adversely impacted by prolonged and ongoing COVID-related measures in China, the continued social restrictions, mass testing, surveillance and lockdown current challenges for consumer-facing companies corresponding to ours. However regardless of the unpredictable surroundings our members and clients should navigate by, they continue to be engaged and laborious at work sharing our superior well being, wellness and sweetness merchandise.
For the quarter, we generated income of $11.7 million, a lower of 12% in comparison with the second quarter of 2022. Whereas not the end result we hope to attain, we’re inspired by optimistic indicators of engagement as our staff safely and cautiously meet as small native gatherings attend our digital conferences and are following the well-structured on-line coaching system we put into full impact through the quarter.
As a refresher, this new on-line coaching program incorporates company-sponsored product coaching and member-led enterprise, motivational and management coaching, all in an effort to higher help the continuing growth and engagement of our members.
We have been happy to have efficiently hosted an earnings to home incentive journey in Xiamen, title are, [Super Me Journey], the place round 150 members took half in some a lot deserved staff bonding actions and coaching. We sit up for holding extra of those home [Super Me] occasions sooner or later as a chance to additional join with members and strengthen their data of merchandise in our enterprise.
Exterior of China and Hong Kong, a strategic calendar of each in-person, in-virtual occasions is supporting staff growth and attracting new clients to our product traces and enterprise alternatives.
In North America, profitable trainings have been held at our 3 Wholesome Life-style Middle Plus areas in Richmond, British Columbia in Canada; Metuchen, New Jersey; and Rowland Heights in California. And we celebrated the Mid-Autumn Pageant with greater than 120 in attendance for an occasion spotlighting our Premium Noni Juice.
In the course of the quarter, we additionally launched an all-inclusive cruise qualification that runs by This autumn to the Bahamas and can set sail in March 2023.
Final month, we held an in-person wellness occasion in Gothenburg, Sweden attended by 140 European members. At this occasion, we teed up our January 2023 European occasion, and we’re more than happy by the response having offered out all obtainable tickets.
Around the globe, our groups are able to journey and expertise new cultures and areas once more. In the course of the quarter, a number of markets launched into incentive journeys, together with: our Peru members touring to Punta Cana within the Dominican Republic; our European staff touring to Zadar, Croatia; our Russian staff touring to Lake Baikal; and our Taiwan staff touring to Yilan.
Our potential to couple rewarding journey experiences with enterprise and product coaching helps strengthen the reference to our members, and members with their groups and friends to assist drive engagement and retention. We stay dedicated to designing gross sales initiatives at an area stage to help our groups.
I am happy to announce that we lately kicked off worldwide digital initiatives to enhance our buyer acquisition, member onboarding and the general purchasing expertise for each distributors and clients alike. We consider this on-line focus shall be a key driver for future progress and improve productiveness and help our shareholder worth.
Whereas lingering COVID-19 rules and international financial elements impacting a lot of our markets presents challenges to our enterprise. We consider our fundamentals are robust. Our continued deal with the important thing areas of buyer progress, market growth, new product innovation and digital enhancement initiatives to enhance efficiency and productiveness will profit us in the long term.
We need to thank our loyal members who day in and time out work to construct their NHT enterprise by sharing our unimaginable product line and alternative with others. Our devoted members are really dedicated to bettering the well being, wellness and high quality of lifetime of others.
With that, I might like to show the decision over to our CFO, Scott Davidson, to debate our monetary ends in higher element. Scott?
Thanks, Chris. Complete income for the third quarter was $11.7 million, a 12% lower in comparison with $13.4 million within the second quarter of 2022 and a lower of 18% in comparison with $14.3 million within the third quarter of 2021. As Chris said, the prolonged and ongoing COVID-related measures in China adversely impacted our outcomes through the third quarter of 2022. And current challenges for consumer-facing companies corresponding to ours. We anticipate these challenges will proceed to affect our monetary outcomes as Zero COVID insurance policies stay in impact and the working surroundings unpredictable.
Our lively member base decreased 4% to 41,170 at September 30 from 43,020 at June 30, and was down 10% from 45,950 at September 30 of final yr.
Turning to our value and working bills. Gross revenue margin of 73.6% decreased from 74.3% within the third quarter of final yr as a result of affect of comparatively fastened value on a decrease stage of web gross sales in addition to a lower in administrative price income. Commissions expense as a p.c of complete income for the third quarter decreased to 41.5% from 42.2% within the prior yr quarter resulting from much less supplemental incentive prices.
Promoting, normal and administrative bills for the quarter have been $3.9 million in comparison with $4.1 million a yr in the past. The lower in our SG&A from the prior yr quarter displays decrease skilled and bank card charges. Because of this, working loss for the quarter was $145,000 in comparison with working earnings of $479,000 within the third quarter final yr. We recorded an earnings tax good thing about $5,000 for the quarter in comparison with $45,000 within the third quarter final yr.
Internet earnings for the third quarter totaled $47,000 or breakeven per diluted share in comparison with $471,000 or $0.04 per diluted share within the third quarter of 2021.
Now I will flip to our steadiness sheet and money stream. Complete money and money equivalents have been $70.7 million at September 30, down from $75.6 million at June 30. Internet money utilized in working actions was $2.5 million within the third quarter in comparison with $1.1 million within the third quarter final yr.
As returning capital to our stockholders stays a prime precedence, I’m happy to announce that on October 31, our Board of Administrators declared one other quarterly money dividend of $0.20 per share, which shall be payable on November 25 to stockholders of file as of November 15.
As we proceed to plan and implement methods to enhance efficiency and productiveness with our debt-free steadiness sheet and extremely variable value construction, we consider we’re effectively positioned to enhance monetary efficiency in the long term in help of shareholder worth.
That completes our ready remarks. I’ll now flip the decision again over to the operator.