NHT Global(NHTC) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 were $10,737,000, a decrease of 1.95$10,951,000 in Q1 2024[17] - Gross profit for Q1 2025 was $7,905,000, down from$8,039,000 in Q1 2024, reflecting a gross margin of approximately 73.6%[17] - Net income for Q1 2025 was $122,000, a decline of 35$188,000 in Q1 2024[19] - Total net sales for the three months ended March 31, 2025, were $10.7 million, a decrease of 2$10.9 million in the same period of 2024[41] - Product sales for the three months ended March 31, 2025, were $10.5 million, compared to$10.6 million in the same period of 2024[41] - The Company’s diluted net income per common share for the three months ended March 31, 2025, was $0.01, down from$0.02 in the same period of 2024[30] - Gross profit for the three months ended March 31, 2025, was $7,905,000, compared to$8,039,000 for the same period in 2024, reflecting a decrease of 1.7%[75] - Commissions expense increased to 41.8% of net sales in Q1 2025, up from 41.0% in Q1 2024, due to higher weekly commissions[107] Assets and Liabilities - Total current assets decreased to $48,806,000 as of March 31, 2025, compared to$50,983,000 at the end of 2024[15] - Total liabilities slightly decreased to $22,297,000 from$22,487,000 at the end of 2024[15] - The total stockholders' equity decreased to $30,882,000 as of March 31, 2025, from$32,872,000 at the end of 2024[15] - Total assets as of March 31, 2025, were $53,179,000, a decrease from$55,359,000 as of December 31, 2024[78] - The Company had contract liabilities of $5.4 million as of March 31, 2025, up from$4.9 million at the end of 2024, primarily due to $3.5 million received for unshipped product orders[39] - Deferred revenue as of March 31, 2025, was$6.9 million, consisting of $5.4 million in unshipped product orders and$1.5 million in auto ship advances[105] Cash Flow and Investments - Cash and cash equivalents increased to $21,688,000 from$13,533,000 at the end of 2024, marking a significant improvement[15] - The Company reported a net cash provided by operating activities of $484,000 for Q1 2025, down from$549,000 in Q1 2024[23] - Cash provided by operations for the first three months of 2025 was $484,000, down from$549,000 in the same period of 2024[112] - Cash flows from investing activities totaled $10.0 million in Q1 2025, compared to cash used of$28.5 million in Q1 2024, with $17.4 million spent on marketable securities[113] - As of March 31, 2025, cash, cash equivalents, and marketable securities totaled$41.9 million, a decrease of $2.0 million from December 31, 2024[111] - The Company recognized share-based compensation expense of$34,000 for the three months ended March 31, 2025, compared to $37,000 in the same period of 2024[64] Dividends and Stock Repurchase - The company declared dividends of$0.20 per share, totaling $2,303,000 for the quarter[20] - Cash dividends of$0.20 per common share were declared and paid, totaling $2.3 million for each quarter in 2025 and 2024[68] - The Company declared a quarterly cash dividend of$0.20 per share, payable on May 23, 2025, to stockholders of record on May 13, 2025[84] - The stock repurchase program has $21.9 million remaining from the authorized$70.0 million as of March 31, 2025[115] Market and Operational Insights - The Company operates in multiple markets, including the Americas, Greater China, Southeast Asia, and Europe, with no single market other than Hong Kong exceeding 10% of total net sales[42] - Approximately 94% of the Company's net sales were generated from subsidiaries located outside the Americas, with the Hong Kong subsidiary accounting for 85% of net sales in the latest fiscal quarter[87] - In Q1 2025, the company generated approximately 85% of its revenue from its e-commerce direct selling platform in Hong Kong, primarily from sales to members in China[88] - The Company operates in various markets, including the Americas, Greater China, Southeast Asia, and Europe, with a focus on expanding in promising markets[85] - The ongoing U.S.-China trade tensions have resulted in significant tariffs, including a 125% reciprocal tariff on Chinese imports, which may adversely affect the company's operations and costs[129] Corporate Changes and Future Outlook - The company relocated its corporate headquarters from Hong Kong to California in February 2025 due to changes in the political and economic landscape[90] - The political and economic environment in Hong Kong may adversely affect the company's future business and financial condition[90] - The company is exploring sourcing products from other jurisdictions to mitigate the impact of U.S. tariffs on Chinese imports[91] - The Company expects to recognize revenue from remaining performance obligations within the next twelve months[39] - The Company plans to focus investments in Greater China and other strategic markets, including Southeast Asia, India, South America, and Europe[118] Risk Management - The company maintains that its existing liquidity is adequate to fund normal operations and financial commitments for the foreseeable future[116] - There were no changes in internal control over financial reporting that materially affected the company during the fiscal quarter ended March 31, 2025[124] - The company has not identified any material changes to its risk factors since the last annual report[128]