Reliv third quarter net sales decrease 7.3% to $17.3 million

Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2011.

Net sales for the quarter were $17.3 million, a 7.3 percent decrease from the third quarter last year. Net U.S. sales totaled $14.1 million, down from third-quarter 2010 net sales of $16.0 million.

Net sales outside of the United States rose 17.7 percent in the third quarter of 2011 compared to the prior-year quarter, led by the European market where net sales more than doubled.

Net income for the third quarter of 2011 was $49,000 or $0.00 per diluted share, compared to $172,000 or $0.01 per diluted share in the 2010 third quarter. The decline in net income is primarily due to the decrease in U.S. net sales.

"We are focused on increasing sales in the United States, though we are faced with a tough economic environment," said Robert L. Montgomery, chairman, president and chief executive officer of Reliv. "Consumer confidence is at its lowest level since early 2009, and consumers appear to be spending less as they reduce debt," Montgomery said.

He added, "We are developing a program designed to increase our customer base quickly, with a longer-term goal of turning a percentage of these new customers into distributors who want to build a Reliv business.  Ultimately, this program should help our existing distributors expand their own sales organizations," Montgomery said.

"We also continue to roll out our new branding initiative. We plan to strengthen our interactive marketing efforts and we continue to work on new-product development," Montgomery said.

"At the same time, we have a focus on reducing costs in all of our offices," he added.  Reliv reported a reduction in selling, general and administrative expenses of $312,000 in the third quarter of 2011 compared to the prior-year quarter.

Net sales for the first nine months of 2011 were $57.0 million, which represents a 5.4 percent decrease from the same period in 2010. Reliv's international net sales, driven by strong results in Europe, rose 8.0 percent in the first three quarters of 2011 compared with the first three quarters last year. In the United States, net sales declined 7.7 percent due to the same issues in consumer confidence that impacted sales in the third quarter.

Reliv reported net income of $728,000, or $0.06 per diluted share in the first nine months of 2011, compared to $1.1 million or $0.09 per diluted share in the same period of 2010.

Reliv's total distributor count was 57,660 as of September 30, 2011, a reduction of 7.3 percent from the same date in 2010. New distributor enrollments for the quarter declined 12 percent from the third quarter last year.

Net cash generated from operating activities in the first nine months of 2011 totaled $2.2 million, representing an increase of $552,000 over the first nine months of 2010, primarily the result of the decrease in inventory.  Reliv had cash and cash equivalents of $7.1 million as of September 30, 2011, an 11.5 percent increase over the same date last year.