NHT Global(NHTC) - 2023 Q1 - Quarterly Report

Financial Performance - Net sales for the three months ended March 31, 2023, were $11,861,000, an increase from$11,546,000 in the same period of 2022, representing a growth of 2.7%[15] - Gross profit for the same period was $8,830,000, compared to$8,638,000 in the prior year, indicating a slight increase of 2.2%[15] - Net income for the three months ended March 31, 2023, was $257,000, a turnaround from a net loss of$105,000 in the same period of 2022[15] - The company reported a comprehensive income of $157,000 for the three months ended March 31, 2023, compared to a comprehensive loss of$333,000 in the same period of 2022[18] - Product sales for the three months ended March 31, 2023, were $11.048 million, compared to$10.322 million for the same period in 2022, reflecting an increase of 7.0%[41] - The primary reporting segment's income from operations for the three months ended March 31, 2023, was $1.827 million, compared to$1.915 million for the same period in 2022, reflecting a decrease of 4.6%[83] - Other income increased to $681,000 for the three months ended March 31, 2023, compared to$110,000 in the same period last year[118] Assets and Liabilities - Total current assets decreased to $75,012,000 as of March 31, 2023, down from$77,551,000 at the end of 2022, reflecting a decline of 3.3%[13] - Total liabilities decreased to $32,132,000 as of March 31, 2023, compared to$32,666,000 at the end of 2022, a reduction of 1.6%[13] - Cash and cash equivalents as of March 31, 2023, were $66,610,000, down from$69,667,000 at the end of 2022, a decrease of 4.0%[13] - Working capital decreased by $2.1 million to$55.0 million as of March 31, 2023, compared to December 31, 2022[121] Expenses - Operating expenses for the three months ended March 31, 2023, totaled $9,224,000, slightly higher than$9,021,000 in the same period of 2022, an increase of 2.3%[15] - Selling, general and administrative expenses decreased to $4.2 million for the three months ended March 31, 2023, from$4.3 million in the same period last year[117] - Compensation expense related to phantom shares for the three months ended March 31, 2023, was $127,000, down from$196,000 for the same period in 2022[73] - Commissions expense was 42.1% of net sales for the three months ended March 31, 2023, up from 41.0% in the prior year[116] Cash Flow - The company reported a net cash used in operating activities of $696,000 for the three months ended March 31, 2023, significantly improved from$2.348 million used in the same period of 2022[24] - Cash, cash equivalents, and restricted cash at the end of the period were $66.648 million, down from$79.464 million at the end of March 31, 2022[24] - The effect of exchange rates on cash, cash equivalents, and restricted cash resulted in a loss of $91,000 for the three months ended March 31, 2023[24] Market and Operations - The company operates in multiple international markets, including the Americas, Greater China, Southeast Asia, and Europe, with a focus on direct-selling and e-commerce for personal care and wellness products[26] - The company generated approximately 94$0.20 per common share during the first quarter of 2023, totaling $2.3 million[75] - The company has$21.9 million remaining available for future purchases under its stock repurchase program, which was authorized for a total of $70.0 million[76] Tax and Regulatory Matters - The effective income tax rate for the three months ended March 31, 2023, includes estimates for foreign income inclusions such as global intangible low-taxed income (GILTI)[59] - The company has a valuation allowance against deferred tax assets in certain foreign jurisdictions with an overall net operating loss as of March 31, 2023[59] - The Company does not expect a material impact on its financial statements from the finalized U.S. tax regulations effective March 7, 2022[135] Membership and Commissions - As of March 31, 2023, the company had 38,330 active members, a decrease from 38,660 at December 31, 2022, and 44,490 at March 31, 2022[90] - Member commissions represented 42% of net sales in the first three months of 2023, compared to 41% in the same period of 2022[107]