Natural Health Trends (NHTC) investor relations material

Executive summary

• Net sales for Q3 2025 were $9.5 million, down 11% year-over-year, with nine-month sales at $30.0 million, down 7%, mainly due to negative sentiment and economic uncertainty in China and Hong Kong.

• Orders decreased 5% year-over-year but rose 5% sequentially.

• Major restructuring plan underway, targeting $1.5 million in annualized savings by mid-2026 through workforce optimization, cost reductions, and facility lease adjustments.

• Net loss for Q3 2025 was $431,000 ($0.04 per diluted share), and for the nine months was $294,000 ($0.03 per share), compared to net income in the prior year.

• Active members declined to 28,030 as of September 30, 2025, from 30,880 a year earlier.

Financial highlights

• Gross profit margin was 73.7% for Q3 2025, slightly down from 74.1% last year, impacted by inventory write-offs.

• Operating loss was $495,000 for Q3 2025 and $1.2 million for the nine months, both higher than the prior year.

• Commissions expense rose to 40.9% of Q3 sales, and 41.2% for the nine months, due to higher member commissions.

• Net cash used in operating activities was $5.0 million for the first nine months, compared to $3.5 million last year; cash, equivalents, and marketable securities totaled $32.0 million at quarter-end.

• Dividend of $0.20 per share declared for Q3 2025.

Outlook and guidance

• Restructuring expected to yield $1.5 million in annualized savings by mid-2026.

• One-time restructuring charge of $250,000 anticipated in Q4 2025.

• Quarterly cash dividend to be reduced to $0.10 per share in Q1 2026 to support investments in technology and marketing.

• Continued investment in AI-enabled marketing and member-interface systems to drive engagement and growth.

• Management expects continued uncertainty due to trade tensions, tariffs, and consumer sentiment in China.