Reliv results show strong global growth

- Last updated on GMT

Related tags: Percent, Cholesterol, Atherosclerosis, Clinical trial

A solid business plan and an international outlook has delivered
another set of bumper full year results for Reliv International,
with operating profit up 21.8 percent to $8.98 million from $7.37
million in 2003 and a 26 percent increase in net sales to $96.98
million, reports Jess Halliday.

Net income rose 24 percent to $5.37 million, or $0.31 per diluted share, over the 12-month period.

But quarterly results reveal that the lion's share of Reliv's growth came in the first six months. While net sales for the three months ended 31 December (4Q 2004) were consistent with the full year picture, rising 22 percent on the prior year period to $24.44 million, a 23.8 increase in expenses meant that income from operations rose just 2.3 percent to $2.13 million. In 3Q, income from operations rose just 0.1 percent.

In 2Q, on the other hand, it rose 30 percent and in 1Q an impressive 64 percent.

The company attributed its higher-than-usual 4Q expenses to one-off costs associated with Sarbanes-Oxley compliance and startup costs of its manufacturing equipment upgrade.

The year has seen Reliv broaden its horizons by moving into lucrative new markets. In July 2003 it announced its entry into Asia, spearheaded by the grant the previous month of a five-year license to conduct direct selling in Asia and in February 2004 expanded its reach in the region to Malaysia.

The combined international markets reported net sales growth of 18 percent in 2004, but the United States is still leading the pack with a 27 percent growth, and 4Q 2004 represents the 11th consecutive quarter of net sales growth of at least 20 percent.

This sustained level of growth is the company's global blueprint. President and CEO Robert Montgomery said: "We believe our international markets are capable of producing similar results and we are determined to make it happen."

Montgomery also pointed out that that the sales growth has been achieved without major product introductions. Given this, it will be interesting to see how the launch of CardioSentials, announced last month, impacts on sales in the coming year.

The heart health product was the first to undergo clinical trials under a new arrangement between the company and the University of Scratton, Pennsylvania, which aims to provide evidence of the safety and efficacy of Reliv's products.

The 16-week randomized double-blind, placebo-controlled crossover study involved two groups of participants taking CardioSentials, which contains 1500 mg of phytosterols per serving. One was taking statin medication at the same time and the other was not.

The results showed a 7 percent decrease in total cholesterol in patients not taking the statins, with a 9 percent decrease in 'bad' cholesterol LDL, a 4 percent increase in 'good' cholesterol HDL and a 13 percent decrease in triglycerides.

In those also taking statins, CardioSentials was reported to produce no adverse reactions and to further lower their levels of LDL.

In his summary report Dr Joe Vinson, who led the study, said that the "overall effect of the supplement for participants was a significant reduction in their 10-year risk of developing cardiovascular disease"​.

Whilst these results were welcome, proving the product's efficacy was not the study's only aim.

"We spent more money on testing for safety than for efficacy,"​ David Barnes, vice president, technical affairs and manufacturing operations, told​. "Statins have a lot of side effects and we wanted to make sure this product is safe for the people who need it."

Some of the core existing products are also being submitted to human clinical trials and the results are expected to be announced by the end of 2005.

Last month Reliv announced its membership of the Council for Responsible Nutrition and has recently invested more than a million dollars in increasing throughput and building higher quality standards at its St Louis manufacturing facility, a move that Barnes called "one of the best things we have ever done in the company"​.

The single facility is to manufacture products for Reliv's worldwide operations and will help ensure consistency across all the company's products and markets.

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