Natural Health Trends Corp.

Greetings and welcome to the Natural Health Trends Corporation second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, Kim Orlando, with Addo Investor Relations. Thank you. You may begin.

Thank you and welcome to Natural Health Trends Second Quarter 2021 Earnings Conference Call. During today's call, there may be statements made relating to the future results of the company that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results, performance, or achievements could differ materially from those anticipated in such forward-looking statements through the result of certain factors including those set forth in the company's filings with the Securities and Exchange Commission. It should also be noted that today's call will be webcast live and can be found on the investor section of the company's corporate website at naturalhealthtrendscorp.com. Instructions can be found for accessing the archived version of the conference call and today's financial results press release, which was issued at approximately 9 a.m. Eastern Time. At this time, I'd like to turn the call over to Chris Sharn, President of Natural Health Trends.

Thank you, Kim, and thanks to everyone for joining us this morning to discuss our second quarter 2021 financial results. With me today is Scott Davidson, our Senior Vice President and Chief Financial Officer. We were pleased with our second quarter financial performance, which reflected sequential growth despite ongoing macroeconomic challenges. we generated revenue of $16.2 million, an increase of 20% compared to $13.5 million in the first quarter of 2021, and a decrease of 2% compared to $16.4 million in the second quarter of 2020. Our performance compared to the prior quarter was primarily driven by our first major in-person event of the year, which was TEL in Macau. along with multiple other in-person fly-high training events and roadshows, which are helping to rejuvenate momentum in our core markets. Partially offsetting this strength was sporadic coronavirus outbreaks, hampering meeting turnout, along with global supply chain constraints, which have lengthened lead times for some of our products. Compared to the second quarter of 2020, revenue decreased 2%, Partially offsetting this decline were improvements in certain of our sister markets, with net sales increasing 27% year-over-year outside of our Hong Kong China market. Malaysia, Japan, Korea, Singapore, CIS, North America, India, Taiwan, Peru, and Europe all experienced improved order volume versus a year ago. Similar to the prior year period, We are still navigating through the complexities associated with the COVID-19 pandemic in China and the pockets of outbreaks that continue to occur. This has led to draconic measures implemented by the Chinese government to control the virus, including the required closure of some businesses along with restrictions on public gatherings and travel over the course of the past year. Aside from these challenges, we reported our fifth consecutive quarter of positive operating income and net income, in addition to our third consecutive quarter of positive cash flow generation. Importantly, despite the modest year-over-year reduction in revenue, our total second quarter order volume was still up in the mid-teens range. As a reminder, our order volume in the second quarter of 2020 included several product promotions, which we have since curtailed significantly in an effort to preserve our margins. As I highlighted earlier, a strong contributor to our order volume in the second quarter of 2021 was our first major in-person event held in Macau in early June. However, while this experience was intended for 1,500 participants, clusters of COVID-19 virus outbreaks in nearby cities reduced attendance by more than half. As such, we believe our order volume would have been even stronger had we been able to host the event to a much broader audience as initially planned. In addition to Macau, we held in April in-person fly-high training in China, which attracted nearly 700 attendees and was predominantly focused on business training. In the months that follow, our leaders continue to sponsor and organize a series of marketing activities, both in person and online, including product and business training roadshows. In regard to new products, we launched our Ultra-B Complex Supplement in North America in May and in Hong Kong in June. Its proprietary time-release formula with a high concentration of all-age B vitamins help contribute solid order volume during the quarter. We also released colostrum chewable tablets in India in June, which has been well received. We expect this new product will help drive sales momentum as the Indian market continues its steady recovery in the quarters to come. In summary, we were pleased with our second quarter financial performance to achieve sequential top-line growth. despite ongoing macroeconomic challenges. Our order volume improved both year over year and quarter over quarter, supported by our efforts to maintain momentum through in-person events, product ratios, and exciting new products. Further, our efforts to preserve our margins resulted in continued bottom line profitability for the fifth consecutive quarter. As larger restrictions pertaining to the COVID-19 pandemic continue to ease, we believe this will be a positive development for our business. I'd like to sincerely thank all of our leaders for their ongoing support of and commitment to NHG Global. I'd also like to thank all of our loyal members, preferred customers, employees, and stockholders for their continued dedication to our company. Stay well, and we look forward to reconnecting with you on our third quarter earnings call in November. With that, I'd like to turn the call over to our CFO, Scott Davidson, to discuss our financial results in greater detail. Scott?