Natural Health Reports Net Sales Up 70 Percent

Natural Health Reports Net Sales Up 70 Percent

DALLAS--Natural Health Trends Corp. (AMEX:NHLC) reported a sharp spike insales for its fiscal 2003, primarly due to the increased number of activedistributors for its Lexxus division.

Net sales were approximately $62.9 million for the year ended Dec. 31, 2003,an increase of approximately 70 percent from net sales of just under $37.0million for the previous year. Gross margin for FY03 decreased slightly to 80percent from 81 percent the previous year.

The expansion of the Lexxus sales network into South Korea in the secondquarter of 2003 accounted for 10 percent of the total gain, and an additional 5percent came from the sale of new products introduced during the year. Due tothe tremendous growth in certain Asian markets, the company noted a salesbacklog at the end of the year of approximately $4 million. The backlog isincluded in deferred revenue and will be figured into revenue for the firstquarter of 2004.

Gross profit for FY03 was approximately $50.4 million, a 68 percent increaseover gross profit of $30 million reported in 2002. Increased sales of Lexxusproducts accounted for this jump, which was offset by increased cost of salesdue to a change in 2003 product mix and higher transportation costs.