☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Texas
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75-2508900
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(State or other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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600 S. Royal Lane, Suite 200, Coppell, Texas
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75019
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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The Nasdaq Stock Market LLC
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☒
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Page
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1
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Part I
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Item 1
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2
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Item 1A
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21
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Item 1B
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32
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Item 2
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32
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Item 3
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33
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Item 4
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33
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Part II
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Item 5
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34
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Item 6
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34
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Item 7
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35
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Item 7A
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49
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Item 8
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50
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Item 9
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50
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Item 9A
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50
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Item 9B
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52
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Part III
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Item 10
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Directors, Executive Officers, and Corporate Governance
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52
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Item 11
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Executive Compensation
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52
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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52
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Item 13
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Certain Relationships and Related Transactions, and Director Independence
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52
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Item 14
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Principal Accountant Fees and Services
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52
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Part IV
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Item 15
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52
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53
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· | management’s plans and objectives for future operations; |
· | existing cash flows being adequate to fund future operational needs; |
· | future plans related to budgets, future capital requirements, market share growth, and anticipated capital projects and obligations; |
· | the realization of net deferred tax assets; |
· | the ability to curtail operating expenditures; |
· | global statutory tax rates remaining unchanged; |
· | the impact of future market changes due to exposure to foreign currency translations; |
· | the possibility of certain policies, procedures, and internal processes minimizing exposure to market risk; |
· | the impact of new accounting pronouncements on financial condition, results of operations, or cash flows; |
· | the outcome of new or existing litigation matters; |
· | the outcome of new or existing regulatory inquiries or investigations; and |
· | other assumptions described in this report underlying such forward-looking statements. |
· | overall growth or lack of growth in the nutritional supplements industry; |
· | plans for expected future product development; |
· | changes in manufacturing costs; |
· | shifts in the mix of packs and products; |
· | the future impact of any changes to global associate career and compensation plans or incentives; |
· | the ability to attract and retain independent associates and members; |
· | new regulatory changes that may affect operations or products; |
· | the competitive nature of our business with respect to products and pricing; |
· | publicity related to our products or network marketing; and |
· | the political, social, and economic climate. |
· | In 1994, we developed and began selling our first products containing Manapol® powder, an ingredient formulated to support cell-to-cell communication. |
· | In 1996, we enhanced our products based on the study of glycoproteins and our scientists developed our own proprietary compound, Ambrotose® complex, which we patented. Our Ambrotose® complex is a blend of polysaccharides (composed of monosaccharides) that helps provide support for the immune system. |
· | In 2001, we broadened our proprietary ingredients by developing the Ambroglycin® blend, a balanced food-mineral matrix which helps deliver nutrients to the body and which is used in our proprietary Catalyst™ and Glycentials® vitamin/mineral supplements. |
· | In 2004, we introduced our proprietary blend of antioxidant nutrients, MTech AO Blend® ingredient, which is used in our proprietary antioxidant Ambrotose AO® product. |
· | In 2006, we introduced a unique blend of plant-based minerals, natural vitamins, and standardized phytochemicals for use in our proprietary PhytoMatrix® product. We also introduced a compound used in reformulated Advanced Ambrotose® complex. This compound allows a more potent concentration of the full range of mannose-containing polysaccharides occurring naturally in aloe to be produced in a stable powdered form. |
· | In 2007, we introduced into the United States market our skin care and anti-aging line of products that supports skin’s natural texture, beauty, and elasticity. We also launched our PhytoMatrix® caplets, Advanced Ambrotose® capsules and Manna•Bears™ supplement into international markets. |
· | In 2008, we introduced a proprietary proteolytic enzyme and phytosterol dietary supplement that supports the body’s natural recovery processes associated with physical activity in our BounceBack® capsules. We also introduced a proprietary version of whey protein peptide technology that assists targeted fat loss when combined with exercise and a healthy diet in our OsoLean™ powder. |
· | In 2009, we introduced our Omega-3, which features EPA/DHA essential acids, PhytoBurst™ Nutritional Chews formulated with vitamins, minerals, and phytonutrients from food-sourced ingredients, and GI-ProBalance™ Slimstick, which is a synbiotic digestive product containing probiotics, prebiotics, and digestive enzymes. In addition, we improved our Ambrotose® products to include beta-Carotene. |
· | In 2010, we launched our Mannatech LIFT™ Skin Care System, which is paraben-free and formulated to give skin a more natural youthful appearance. |
· | In 2011, we introduced our reformulated version of our Omega-3 supplement, which now includes Vitamin D3 and features EPA/DHA essential acids. We expanded several previously launched products from our domestic line to our international markets. |
· | In 2012, we launched our NutriVerus™ powder, a single product that features all of our core scientific technologies at a very affordable price. This unique, ground-breaking product combines our core glyconutrient technologies with vitamins, minerals, antioxidants and stabilized rice bran, all based on Real Food Technology solutions. |
· | In 2013, we launched Ūth™ skin cream, a breakthrough in anti-aging that incorporates Mannatech’s glyconutrient technology along with a microsphere delivery system that supports more thorough delivery of the active ingredients to all levels of the skin. |
· | In 2014, we launched GlycoBOOM™ Advanced Immune Support Supplement, packed with nutrients that are designed to support the body’s natural defenses. |
· | In 2015, Mannatech introduced a new brain supplement, Cognitate™, featuring a proprietary blend of natural ingredients to aid memory, recall and cognition. |
Product Category
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Representative Products
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Health
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Ambrotose® complex, Ambrotose AO®, Advanced Ambrotose®, PhytoMatrix®, Manna•Bears™, Catalyst™, PLUS™, Manna-C™, CardioBALANCE®, ImmunoSTART®, BounceBack®, MannaCLEANSE™, PhytAloe®, GI-Zyme®, Omega-3 with Vitamin D3, PhytoBurst™ Nutritional Chews, NutriVerus™, Optimal Support Packets, GI Pro Balance™ Slimstick, GlycoBOOMTM Slimsticks, Manapol® powder, and Cognitate™.
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Weight and Fitness
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OsoLean™, GlycoSlim®, AmbroStart®, SPORT™, and EM·PACT®.
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Skin Care and Anti-Aging
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Emprizone®, FIRM with Ambrotose®, LIFT™ Multiphase Serum, LIFT™ Night Repair Crème, LIFT™ Body Lotion, Ūth™ Cleanser, Ūth™ Skin Rejuvenation Crème, Ūth™ Moisturizer, FreshDen™, Gel Mask, and Organt.
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2015
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2014
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|||||||||||||||
Sales by product
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% of total net sales
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Sales by product
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% of total net sales
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|||||||||||||
Advanced Ambrotose®
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$
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59,026
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32.7
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%
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$
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63,791
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33.6
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%
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||||||||
Ambrotose®
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9,686
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5.4
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%
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10,895
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5.7
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%
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||||||||||
NutriVerus™
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8,541
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4.7
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%
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10,530
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5.5
|
%
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||||||||||
PLUS™
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8,239
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4.6
|
%
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8,923
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4.7
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%
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||||||||||
Ūth™ Skin Rejuvenation
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5,394
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3.0
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%
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13,431
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7.1
|
%
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||||||||||
Total
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$
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90,886
|
50.4
|
%
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$
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107,571
|
56.6
|
%
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· | marketability and proprietary nature of the product; |
· | demand for the product; |
· | competitors’ products; |
· | regulatory considerations; |
· | availability of ingredients; and |
· | data supporting claims of efficacy and safety. |
1. | High-Quality, Innovative, Proprietary Products. We base our product concept on the scientific belief that certain glyconutrients, also known as monosaccharides, are essential for maintaining a healthy immune system. We believe the addition of effective nutritional supplements to a well-balanced diet, coupled with an effective exercise program, will enhance and help maintain optimal health and wellness. We focus on producing products that are from all-natural sources with no synthetic or chemically derived additives. We formulate our products with predominately naturally-occurring, plant-derived, carbohydrate-based, safe ingredients that are designed to use nutrients working through normal physiology to help achieve and maintain optimal health and wellness, rather than developing common synthetic, carbohydrate-based products. |
2. | Research and Development Efforts. We are steadfast in our commitment to quality-driven research and development. We use systematic processes for the research and development of our unique proprietary product formulas, as well as the identification of quality suppliers and manufacturers. Our research and quality assurance programs are outlined on our corporate websites www.mannatechscience.org, www.mannatech.com, and www.allaboutmannatech.com. |
3. | Quality Assurance Program. Mannatech uses only qualified manufacturing contractors to produce, test, and package our finished products. These contractors must be compliant and current with required certifications and they must strictly adhere to our own quality standards for all markets. Certifications and guidelines that our contract manufacturers are required to carry and/or follow include: |
· | the FDA’s current Good Manufacturing Practices for manufacturing, packaging, labeling, and holding of dietary supplements; |
· | the FDA’s Good Manufacturing Practices for human food; |
· | the requirements of the Natural Health Products Directorate of Canada; |
· | the Korean Food and Drug Administration; |
· | certification by the Therapeutic Goods Administration of Australia, when necessary; |
· | the European Union’s Food Supplement Directive and Nutrition and Health Claims Regulations, as well as individual member state legislation; |
· | the Taiwan Food and Drug Administration; |
· | the Japan Ministry of Health Labor and Welfare; |
· | the Singapore Health Sciences Authority; |
· | the South African Department of Health and Medicines Control Council; and |
· | the Hong Kong Food and Environmental Hygiene Department and Department of Health Drug Office. |
· | ten products are certified according to the NSF/ANSI 173 Dietary Supplement Standard—the only American National Standard for dietary supplements. This certification ensures that this product contains only the ingredients indicated on the label and is free of impurities, and that Good Manufacturing Practices were used in the manufacturing facility; and |
· | twenty-six products have been tested and confirmed to be gluten-free by Covance Laboratories. |
4. | Global Scientific Advisory Board. A charter for an advisory board has been established and will be filled by a combination of independent scientists and doctors from multiple disciplines, along with two members of Mannatech staff. Members of the Global Scientific Advisory Board (GSAB) will review each new and reformulated product to ensure ingredients and products are up to Mannatech’s high standards and are in line with the latest, viable research. GSAB may also make ingredient and product suggestions for new products. |
5. | High-Caliber, Industry-Leading Independent Associates. Our global team of independent associates is comprised of dedicated, hard-working, high-caliber individuals, many of whom have been associated with the network marketing industry for decades and have been loyal to us since our beginning in 1993. To capitalize on their wealth of knowledge and experience, we sponsor a panel of independent associates, called the “North American Associate Advisory Council” (the “Advisory Council”), which helps identify and effectively relay the needs of our independent business-building associates to us. The members of the Advisory Council are elected by their peers and serve a three-year term. The Advisory Council meets periodically with our team of senior management to recommend changes, discuss issues, and provide new ideas or concepts, including a full spectrum of innovative ideas for additional quality-driven nutritional supplements aimed at maintaining optimal health and wellness. |
6. | Support Philosophy for Our Independent Associates and Members. We are fully committed to providing the highest level of support services to our independent associates and members and believe that we meet expectations and build customer loyalty through the following: |
· | offering highly-personalized and responsive customer service; |
· | offering a satisfaction guarantee product return policy; |
·
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providing comprehensive corporate websites (www.mannatech.com, www.allaboutmannatech.com, www.mannatechscience.org, www.library.mannatech.com, www.events.mannatech.com, www.mannafest.com and www.mannatechlive.com), that provide instant access to Internet ordering, marketing, technical and educational information, and unique and innovative marketing tools;
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· | maintaining an extensive web-based downline management system called Success Tracker™ that provides access to web conferencing and downline organization reporting for our independent associates at minimal costs; |
· | offering, in the United States and Canada, an effective compilation of online marketing and training tools, including MannaSocial, and our Navig8 Global Business System; |
· | offering updated training/orientation and compliance programs for our independent associates; |
· | providing strategically based distribution fulfillment centers to ensure products are shipped on time and at minimal cost; and |
· | sponsoring marketing events, designed to provide information, education, and motivation for our dedicated business-building associates and to help stimulate business development. These events provide an interactive venue for introducing new products and services and allow interaction between our management teams, outside researchers, and independent associates. |
7. | Flexible Operating Strategy. We believe efficiency, focus, and flexibility are paramount to our operations. For more than a decade, we have contracted with third parties to supply and manufacture our proprietary raw materials and products, which we believe allows us to minimize capital expenditures, capitalize on such parties’ expertise, and build additional resources for strategic alliances in the areas of distribution and logistics, product registration, and export requirements. By contracting with various suppliers and manufacturers and by outsourcing distribution for all of our operations, we believe we can quickly adapt operations to current demands in a timely, efficient, and cost-effective manner. We monitor the performance of our third party contractors to ensure they maintain a high quality of service. In addition, we identify alternative sources for our raw materials suppliers and finished goods manufacturers to help prevent any risk of interruption in production should any existing contractors become unable to perform satisfactorily. |
8. | Experience and Depth of Our Management Team and Board of Directors. We believe that our team of executives has extensive experience in every aspect of business operations and is highly focused on our success. At December 31, 2015, our Board of Directors is composed of seven directors, including five independent directors. We believe our board members have a wealth of knowledge and experience in most aspects of our business operations and are especially well versed in network marketing, finance, nutritional products, regulatory matters, and corporate governance. Our entire management team is committed to delivering high-quality products and superior service. |
· | Strengthening our Financial Results and Adding Value to Our Shareholders and Independent Associates. We focus on improving financial results by striving to increase our revenues in both our domestic and foreign operations and to control our operating costs. |
· | Attracting New Independent Associates and Retaining Existing Independent Associates. We continually examine our global associate career and compensation plan and periodically offer incentives in order to attract, motivate, and retain independent associates. We believe our global associate career and compensation plan encourages greater associate retention, motivation, and productivity. |
· | Carefully Planning and Executing New Market Entries. In order to expand efficiently around the globe, we must continue to present maximum opportunity to our current independent associates as well as those who will join us in the future. |
· | Developing New Products and Enhancing Existing Products. We continue to focus on new areas for future product development. We continue our research efforts and strive to ensure that all of our products are made from high quality, effective ingredients that contain one or more of our proprietary compounds, which we believe supports our goal to be a cutting-edge industry leader. We expect that any future products we develop will further complement and enhance our existing products. |
· | offering educational meetings and corporate-sponsored events that emphasize business-building and compliance related information; |
· | sponsoring various informative and science-based conference calls, web casts, and seminars; |
· | providing automated services through the Internet and telephone that offer a full spectrum of information and business-building tools; |
· | maintaining an efficient decentralized ordering and distribution system; |
· | providing highly personalized and responsive order processing and customer service support accessible by multiple communication channels including telephone, Internet, or e-mail; |
· | offering 24-hour, seven days a week access to information and ordering through the Internet; |
· | offering Success TrackerTM, a customized business-building genealogy system, which contains graphs, maps, alerts, reports, and web video conferencing for our independent associates; |
· | offering, in the United States and Canada, a compilation of online marketing and training tools, including MannaSocial, and our Navig8 Global Business System; and |
· | providing a wide assortment of business-building and educational materials to help stimulate product sales and simplify enrollment. |
· | generating product sales from an independent associate’s global downline to earn certain achievement levels; |
· | enrolling new independent associates or members who place a product order; |
· | obtaining certain achievement levels and enrolling other independent associates who place qualifying orders; |
· | obtaining and developing certain achievement levels within their downline organizations to qualify for additional bonuses; and |
· | various other incentive programs. |
· | Retail Customer Product Return Policy. This policy allows a retail customer to return any of our products to the original independent associate who sold the product and receive a full cash refund by the independent associate for the first 180 days following the product’s purchase, if located in the United States and Canada, and for the first 90 days following the product’s purchase in the remaining countries. The independent associate may then return or exchange the product based on the independent associate product return policy. |
· | Independent Associate and Member Product Return Policy. This policy allows the independent associate or member to return an order within one year of the purchase date upon terminating his/her account. If an independent associate or member returns a product unopened and in good condition, he/she may receive a full refund minus a 10% fee. We may also allow the independent associate or member to receive a full satisfaction guarantee refund if they have tried the product and are not satisfied for any reason, excluding promotional materials. This satisfaction guarantee refund applies in the United States and Canada, only for the first 180 days following the product’s purchase, and applies in the remaining countries for the first 90 days following the product’s purchase; however, any commissions earned by an independent associate will be deducted from the refund. If we discover abuse of the refund policy, we may terminate the independent associate’s or member’s account. |
· | minimize the time required to process orders and distribute products; |
· | provide customized ordering information; |
· | quickly respond to information requests, including providing detailed and accurate information to independent associates about qualification and downline activity; |
· | provide detailed reports about paid commissions and incentives; |
· | support order processing and customer service departments; and |
· | help monitor, analyze, and report operating and financial results. |
· | direct selling and network marketing systems; |
· | transfer pricing and similar regulations affecting the amount of foreign taxes and customs duties paid; |
· | taxation of independent associates and requirements to collect taxes and maintain appropriate records; |
· | how a company manufactures, packages, labels, distributes, imports, sells, and stores products; |
· | product ingredients; |
· | product claims; |
· | advertising; and |
· | the extent to which companies may be responsible for claims made by independent associates. |
· | the Food and Drug Administration (the “FDA”); |
· | the Federal Trade Commission (the “FTC”); |
· | the Consumer Product Safety Commission; |
· | the Department of Agriculture; |
· | the Environmental Protection Agency; |
· | the United States Postal Service; |
· | state attorney general offices; and |
· | various agencies of the states and localities in which our products are sold. |
· | the identification of dietary or nutritional supplements and their nutrition and ingredient labeling; |
· | requirements related to the wording used for claims about nutrients, health claims, and statements of nutritional support; |
· | labeling requirements for dietary or nutritional supplements for which “high potency,” “antioxidant,” and “trans-fatty acids” claims are made; |
· | notification procedures for statements on dietary and nutritional supplements; and |
· | pre-market notification procedures for new dietary ingredients in nutritional supplements. |
· | the National Provincial Laws, Natural Health Product Regulations of Canada, and the Federal Competition Act in Canada; |
· | the Therapeutic Goods Administration and the Trade Practices Act in Australia; |
· | federal and state regulations in Australia; |
· | national regulations including the Local Trading Standards Offices in the United Kingdom; |
· | regulations from the Ministry of International Trade and Industry in Japan; |
· | regulations from the Commerce Commission and the Fair Trade Act of 1993 in New Zealand; |
· | the Fair Trade Commission, which oversees the Door to Door Sales Act and the Health and Functional Food Act enforced by the Korea Food and Drug Administration in the Republic of Korea; |
· | the Fair Trade Law, which is enforced by the Taiwan Fair Trade Commission and the Administration of Food Hygiene, Health Food Products Administration Act enforced by the Taiwan Department of Health; |
· | the Danish Health Board, the Danish Marketing Practice Act, the Danish Consumer Ombudsman, the Danish Executive Order on Dietary Supplements, the Guidelines for food supplements, and the Danish Act on Foodstuffs in Denmark; |
· | the German Unfair Competition Act, German Regulation on food supplements, and German Law on food and feed; |
· | regulations governing business practices in South Africa; |
· | the Consumer Protection Act, the Sale of Food Act, and various regulations that are governed by the Ministry of Trade and Industry in Singapore; |
· | the Austrian Trade Law (1994), the Food Safety and Consumer Protection Law (2006), and the Food Code in Austria; |
· | the Food and Consumer Products and the Unfair Trade Practices Act, Door to Door Selling Act and Provisions of the General Dutch Civil Code relating to terms and conditions and misleading advertising in the Netherlands; |
· | the Consumer Sales Act, Marketing Practices Act, Distance and Doorstep Sales Act, the Product Liability Act, Product Safety Act, the Companies Act and the Food Act in Sweden; |
· | the Law on Marketing and Contract Conditions, the Law on Repentance Right, the Statutory Order on Self Inspection of Food Provisions, the Law on Food products and Food Safety, and various guidelines from the Norwegian Consumers Agency on telephone selling and internet marketing, in Norway; |
· | the Health Law and various Official Mexican Standards, the consumer protection law, the Mexican Corporate law, the Foreign Investment Law, the Federal Labor law in Mexico, as well as various municipal and state regulations and codes; |
· | various Business, Civil, and Labor Codes in the Czech Republic as well as the Consumer Protection Act, and regulations and edicts of various government agencies such as The Ministry of Health, National Institute of Public Health, State Institute of Drug Control and the Czech Agriculture and Food Inspection Authority; |
· | the Consumer Protection Act in Estonia, and in the area of food supplements the Veterinary and Food Board also enforces local legislation including Estonia Food Act and Medicine Act; |
· | the Finnish Food Act, the Finnish Food Packaging and Consumer Protection Acts, Act on Unfair Business Practice Act, Decrees and other regulations in Finland; |
· | the Consumer Protection Act of 2007, the Distance Selling Regulations Act of 2001 in Ireland; |
· | various European Union (“EU”) regulations and pronouncements, subject to local statutes and regulations, address both our selling activities and the sale of food supplements in EU member nations, including, primarily, the EU Food Supplement Directive (2002/46/EC) and Nutrition and Health Claims Regulations (2006/1924/EC); |
· | the Food and Drugs (Composition and Labeling) Regulations, the Pyramid Schemes Prohibition Ordinance, the Personal Data (Privacy) Ordinance, and the Import and Export Ordinance in Hong Kong; |
· | the Retail Trade Act of January 15, 1996, regulating both multi-level marketing (article 22) and pyramid sales (article 23), and Spanish Law 1/2007 on Consumer Protection (“Spanish Consumers Act”), regulating consumer protection, including warranties and product liability, in Spain; and |
· | the Regulation of Act 1700 of 2013, Article 2.2.50 on December 27, 2013 governs the Activities of Network Marketing or Multilevel Marketing companies through monitoring compensation plans, contract conditions and enacting preventive suspension, in Colombia. |
· | social security taxes; |
· | value-added taxes; |
· | goods and services taxes; |
· | sales taxes; |
· | consumption taxes; |
· | income taxes; |
· | customs duties; |
· | employee/independent contractor regulations; |
· | employment, service pay, retirement pay, and profit sharing requirements; |
· | import/export regulations; |
· | federal securities laws; and |
· | antitrust laws. |
· | claims made about our products; |
· | promises or claims of income or other promises or claims by our independent associates; and |
· | sales of products in markets where the products have not been approved or licensed. |
· | AdvoCare International |
· | GNC Holdings, Inc.; |
· | Herbalife Ltd.; |
· | Nature’s Sunshine Products, Inc.; |
· | NOW Foods; |
· | Nu Skin Enterprises, Inc.; |
· | Reliv’ International, Inc; |
· | Solgar Vitamin and Herb Company, Inc.; |
· | Swanson Health Products; |
· | Usana Health Sciences, Inc.; and |
· | Vitamin Shoppe Industries, Inc. |
· | our products can be introduced into the global marketplace at a much lower up-front cost than through conventional methods; |
· | our key ingredients and differential components found in our proprietary products can be better explained through network marketing; |
· | the network marketing approach can quickly and easily adapt to changing market conditions; |
· | consumers appreciate the convenience of ordering from home, through a sales person, by telephone, or on the Internet; and |
· | network marketing enables independent associates to earn financial rewards. |
· | Amway Corporation; |
· | Forever Living Products, Inc.; |
· | Herbalife International, Inc.; |
· | Mary Kay, Inc.; |
· | Nature’s Sunshine Products, Inc.; |
· | Nu Skin Enterprises, Inc.; |
· | Reliv’ International, Inc.; |
· | Shaklee Worldwide; and |
· | Usana Health Sciences, Inc. |
· | our unique patented, proprietary blend of high-quality products; |
· | our 22 year track record in the business of selling nutritional products; |
· | our model which does not require our independent associates to carry inventory or accounts receivable; |
· | our unique and financially rewarding global associate career and compensation plan; |
· | our innovative marketing and educational tools; and |
· | our easy and convenient delivery system. |
2015
|
2014
|
|||||||
North America
|
181
|
172
|
||||||
Asia/Pacific
|
77
|
74
|
||||||
EMEA
|
29
|
24
|
||||||
Total
|
287
|
270
|
2015
|
2014
|
|||||||
Full-time employees
|
282
|
265
|
||||||
Part-time employees
|
5
|
5
|
||||||
Total
|
287
|
270
|
1.
|
If we are unable to attract and retain independent associates, our business may suffer.
|
· | on-going motivation of our independent associates; |
· | general economic conditions; |
· | significant changes in the amount of commissions paid; |
· | public perception and acceptance of the wellness industry; |
· | public perception and acceptance of network marketing; |
· | public perception and acceptance of our business and our products, including any negative publicity; |
· | the limited number of people interested in pursuing network marketing as a business; |
· | our ability to provide proprietary quality-driven products that the market demands; and |
· | competition in recruiting and retaining independent associates. |
2. | The loss of key high-level independent associate leaders could negatively impact our associate growth and our revenue. |
3. | Changes to our associate compensation arrangements could be viewed negatively by some independent associates, could cause failure to achieve desired long-term results and have a negative impact on revenue. |
· | to address changing market dynamics; |
· | to provide incentives to independent associates that are intended to help grow our business; |
· | to conform to local regulations; and |
· | to address other business needs. |
4. | An increase in the amount of commissions and incentives paid to independent associates and members reduces our profitability. |
5. | The loss of key management personnel could adversely affect our business. |
6. | If government regulations regarding network marketing change or are interpreted or enforced in a manner adverse to our business, we may be subject to new enforcement actions and material limitations regarding our overall business model. |
· | ambiguity in statutes; |
· | regulations and related court decisions; |
· | the discretion afforded to regulatory authorities and courts interpreting and enforcing laws; and |
· | new regulations or interpretations of regulations affecting our business. |
7. | Independent associates could fail to comply with our associate policies and procedures or make improper product, compensation, marketing or advertising claims that violate laws or regulations, which could result in claims against us that could harm our financial condition and operating results. |
8. | We may be held responsible for certain taxes or assessments relating to the activities of our independent associates, which could harm our financial condition and operating results. |
9. | Challenges by private parties to the form of our network marketing system could harm our business. |
10. | If our network marketing activities do not comply with government regulations, our business could suffer. |
11. | If we violate governmental regulations or fail to obtain necessary regulatory approvals, our operations could be adversely affected. |
· | the formulation, manufacturing, packaging, labeling, distribution, importation, sale, and storage of our products; |
· | the health and safety of dietary supplements, cosmetics and foods; |
· | trade practice laws and network marketing laws; |
· | our product claims and advertising by our independent associates; |
· | our network marketing system; |
· | pricing restrictions regarding transactions with our foreign subsidiaries or other related parties and similar regulations that affect our level of foreign taxable income; |
· | the assessment of customs duties; |
· | further taxation of our independent associates, which may obligate us to collect additional taxes and maintain additional records; and |
· | export and import restrictions. |
12. | Increased regulatory scrutiny of nutritional supplements as well as new regulations that are being adopted in some of our markets with respect to nutritional supplements could result in more restrictive regulations and harm our results if our supplements or advertising activities are found to violate existing or new regulations or if we are not able to effect necessary changes to our products in a timely and efficient manner to respond to new regulations. |
13. | If we are unable to protect the proprietary rights of our products, our business could suffer. |
· | our Ambrotose® complex, a glyconutritional dietary supplement ingredient consisting of a blend of monosaccharides, or sugar molecules, used in the majority of our products; |
· | the MTech AO Blend® formulation, our proprietary antioxidant technology used in the Ambrotose AO® complex; and |
· | a compound used in our reformulated Advanced Ambrotose® complex that allows for a more potent concentration of the full range of mannose-containing polysaccharides occurring naturally in aloe. |
14. | Our inability to develop and introduce new products that gain independent associate, member, and market acceptance could harm our business. |
15. | Our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harm our relationship with independent associates and members, our product sales, as well as our financial condition and operating results. |
· | accurately anticipate consumer needs; |
· | innovate and develop new products or product enhancements that meet these needs; |
· | successfully commercialize new products or product enhancements in a timely manner; |
· | price our products competitively; |
· | manufacture and deliver our products in sufficient volumes and in a timely manner; and |
· | differentiate our product offerings from those of our competitors. |
16. | If our outside suppliers and manufacturers fail to supply products in sufficient quantities and in a timely fashion, our business could suffer. |
17. | The loss of suppliers or shortages of raw materials could have an adverse effect on our business, financial condition, or results of operations. |
18. | If we are exposed to product liability claims, we may be liable for damages and expenses, which could affect our overall financial condition. |
19. | Concentration Risk |
2015
|
2014
|
|||||||||||||||
Sales by
product
|
% of total
net sales
|
Sales by
product
|
% of total
net sales
|
|||||||||||||
Advanced Ambrotose®
|
$
|
59,026
|
32.7
|
%
|
$
|
63,791
|
33.6
|
%
|
||||||||
Ambrotose®
|
9,686
|
5.4
|
%
|
10,895
|
5.7
|
%
|
||||||||||
NutriVerus™
|
8,541
|
4.7
|
%
|
10,530
|
5.5
|
%
|
||||||||||
PLUS™
|
8,239
|
4.6
|
%
|
8,923
|
4.7
|
%
|
||||||||||
Ūth™ Skin Rejuvenation
|
5,394
|
3.0
|
%
|
13,431
|
7.1
|
%
|
||||||||||
Total
|
$
|
90,886
|
50.4
|
%
|
$
|
107,571
|
56.6
|
%
|
20. | If we incur substantial liability from litigation, complaints, or enforcement actions or incur liabilities or penalties resulting from misconduct by our independent associates, our financial condition could suffer. |
21. | The global nutrition and skin care industries are intensely competitive and the strengthening of any of our competitors could harm our business. |
22. | A downturn in the economy could affect consumer purchases of discretionary items such as the health and wellness products that we offer, which could have an adverse effect on our business, financial condition, profitability, and cash flows. |
23. | If our international markets are not successful, our business could suffer. |
· | inflation; |
· | the renegotiation or modification of various agreements; |
· | increases in custom duties and tariffs; |
· | changes and limits in export controls; |
· | government regulations and laws; |
· | trademark availability and registration issues; |
· | changes in exchange rates; |
· | changes in taxation; |
· | wars and other hostilities; and |
· | changes in the perception of network marketing. |
24. | Adverse or negative publicity could cause our business to suffer. |
· | the nutritional supplements industry; |
· | skeptical consumers; |
· | competitors; |
· | the safety and quality of our products and/or our ingredients; |
· | regulatory investigations of our products or our competitors’ products; |
· | the actions of our independent associates; |
· | the direct selling/network marketing industry; and |
· | scandals within the industries in which we operate. |
25. | If our information technology system fails or if the implementation of new information technology systems is not executed efficiently and effectively, our business, financial position, and our operating results could be adversely affected. |
· | order processing; |
· | supply chain management; |
· | customer service; |
· | product distribution; |
· | commission processing; |
· | cash receipts and payments; and |
· | financial reporting. |
26 | Taxation and transfer pricing affect our operations and we could be subjected to additional taxes, duties, interest, and penalties in material amounts, which could harm our business. |
27. | Currency exchange rate fluctuations could reduce our overall profits. |
28. | Our stock price is volatile and may fluctuate significantly. |
· | broad market fluctuations and general economic conditions; |
· | fluctuations in our financial results; |
· | future securities offerings; |
· | changes in the market’s perception of our products or our business, including false or negative publicity; |
· | governmental regulatory actions; |
· | the outcome of any lawsuits; |
· | financial and business announcements made by us or our competitors; |
· | the general condition of the industry; and |
· | the sale of large amounts of stock by insiders. |
29.
|
Certain shareholders, directors, and officers own a significant amount of our stock, which could allow them to influence corporate transactions and other matters.
|
30. | We have implemented anti-takeover provisions that may help discourage a change of control. |
31. | Our failure to comply with the NASDAQ Global Select Market continued listing standards may adversely affect the price and liquidity of our shares of common stock as well as our ability to raise capital in the future. |
32. | We are not required to pay dividends, and our Board of Directors may decide not to declare dividends in the future. |
33. | We rely upon our existing cash balances and cash flow from operations to fund our business. In the event that we do not generate adequate cash flow from operations, we will need to raise money through a debt or equity financing, if available, or curtail operations. |
34. | The reduced disclosure requirements applicable to us as a "smaller reporting company" may make our common stock less attractive to investors. |
Location
|
Size
|
Expiration date
|
||
Coppell, Texas (corporate headquarters)
|
110,000 sq. feet
|
March 2018
|
||
Coppell, Texas (distribution center)
|
75,000 sq. feet(1)
|
March 2018
|
||
St. Leonards, Australia (Australian headquarters)
|
850 sq. meters(2)
|
December 2018
|
||
Milton Park, Oxfordshire (U.K. headquarters)
|
3,240 sq. feet
|
August 2017
|
||
Minato-ku, Tokyo, Japan (Japanese headquarters)
|
161 Tsubos(3)
|
November 2016
|
||
Chuo-ku, Osaka, Japan (Japanese training center)
|
73 Tsubos(4)
|
August 2020
|
||
Gangnam-gu, Seoul, Korea (Republic of Korea headquarters)
|
718 Pyong(5)
|
June 2016
|
||
Seo-gu, Daejun, Korea (Regional center)
|
113 Pyong(6)
|
June 2016
|
||
Haewoondae-gu, Busan, Korea (Pusan training center)
|
191 Pyong(7)
|
March 2017
|
||
Incheon, South Korea (Incheon training center)
|
218 Pyong(8)
|
April 2017
|
||
Seoul, South Korea (office)
|
99 Pyong(9)
|
June 2016
|
||
Taipei, Taiwan (Taiwan headquarters)
|
172 Pings(10)
|
February 2020
|
||
Kaohsiung, Taiwan (Taiwan training center)
|
102 Pings(11)
|
June 2020
|
||
Zug, Switzerland (Switzerland headquarters)
|
680 sq. meters(12)
|
— (18)
|
||
Tsim Sha Tsui, Kowloon, Hong Kong (office)
|
170 sq. feet
|
— (18)
|
||
Richmond, BC (Canada training center)
|
1,963 sq. feet
|
September 2017
|
||
Markham, ON (office)
|
1,714 sq. feet
|
September 2019
|
||
Bedfordview, South Africa (office)
|
383 sq. meters(13)
|
— (19)
|
||
Guadalajara, Mexico (customer service center)
|
389 sq. meters(14)
|
March 2017
|
||
Mexico City, Mexico (customer service center)
|
123 sq. meters(15)
|
August 2016
|
||
Monterrey, Mexico (office)
|
149.16 sq. meters(16)
|
June 2016
|
||
Tuxtla, Mexico (office)
|
23.76 sq. meters(17)
|
October 2016
|
||
Singapore (meeting center)
|
1,098 sq. feet
|
August 2016
|
||
Bogota, Columbia (office)
|
700 sq. feet
|
May 2016
|
(2) Approximately 9,150 square feet & subleases 2,153 sq.ft to Morrison Design Partnership
(3) Approximately 5,729 square feet.
(4) Approximately 2,598 square feet.
(5) Approximately 25,549 square feet.
(6) Approximately 4,021 square feet.
(7) Approximately 6,796 square feet.
(8) Approximately 7,757 square feet.
(9) Approximately 3,523 square feet.
(10) Approximately 6,119 square feet.
|
(11) Approximately 3,629 square feet.
(12) Approximately 7,320 square feet.
(13) Approximately 4,123 square feet.
(14) Approximately 4,187 square feet.
(15) Approximately 1,324 square feet.
(16) Approximately 1,606 square feet.
(17) Approximately 256 square feet.
(18). Renewable annually.
(19). Renewable monthly.
|
Item 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
2015:
|
Low
|
High
|
||||||
First Quarter
|
$
|
17.12
|
$
|
28.49
|
||||
Second Quarter
|
$
|
18.00
|
$
|
21.04
|
||||
Third Quarter
|
$
|
16.91
|
$
|
21.00
|
||||
Fourth Quarter
|
$
|
18.55
|
$
|
28.06
|
2014:
|
Low
|
High
|
||||||
First Quarter
|
$
|
12.64
|
$
|
19.96
|
||||
Second Quarter
|
$
|
12.14
|
$
|
18.49
|
||||
Third Quarter
|
$
|
11.77
|
$
|
17.32
|
||||
Fourth Quarter
|
$
|
12.66
|
$
|
30.65
|
· | Net sales attributable to our Ūth™ skin care product were $6.3 million and $13.8 million for 2015 and 2014, respectively, a decrease of $7.5 million. |
· | In connection with our loyalty program, we recognize the dollar equivalent in revenue of loyalty points as the points are applied or forfeited. During 2015 we recognized $23.8 million in revenue and deferred $22.2 million in revenue, resulting in a net recognition of revenue of $1.6 million. During 2014, we recognized $17.0 million in revenue and deferred $21.2 million in revenue, resulting in a net deferral of revenue of $4.2 million. During 2015, $5.8 million more in revenue was recognized in connection with our loyalty program as compared to 2014. |
2015
|
2014
|
Change
|
||||||||||||||||||||||
Total
Dollars
|
% of
net sales
|
Total
dollars
|
% of
net sales
|
Dollar
|
Percentage
|
|||||||||||||||||||
Net sales
|
$
|
180,267
|
100.0
|
%
|
$
|
190,081
|
100.0
|
%
|
$
|
(9,814
|
)
|
(5.2
|
)%
|
|||||||||||
Cost of sales
|
34,102
|
18.9
|
%
|
38,350
|
20.2
|
%
|
(4,248
|
)
|
(11.1
|
)%
|
||||||||||||||
Gross profit
|
146,165
|
81.1
|
%
|
151,731
|
79.8
|
%
|
(5,566
|
)
|
(3.7
|
)%
|
||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Commissions and incentives
|
72,956
|
40.5
|
%
|
75,240
|
39.6
|
%
|
(2,284
|
)
|
(3.0
|
)%
|
||||||||||||||
Selling and administrative expenses
|
34,458
|
19.1
|
%
|
36,193
|
19.0
|
%
|
(1,735
|
)
|
(4.8
|
)%
|
||||||||||||||
Depreciation and amortization
|
1,793
|
1.0
|
%
|
1,608
|
0.8
|
%
|
185
|
11.5
|
%
|
|||||||||||||||
Other operating costs
|
24,814
|
13.8
|
%
|
25,948
|
13.7
|
%
|
(1,134
|
)
|
(4.4
|
)%
|
||||||||||||||
Total operating expenses
|
134,021
|
74.3
|
%
|
138,989
|
73.1
|
%
|
(4,968
|
)
|
(3.6
|
)%
|
||||||||||||||
Income from operations
|
12,144
|
6.7
|
%
|
12,742
|
6.7
|
%
|
(598
|
)
|
(4.7
|
)%
|
||||||||||||||
Interest income
|
210
|
0.1
|
%
|
121
|
0.1
|
%
|
89
|
73.6
|
%
|
|||||||||||||||
Other expense, net
|
(4,155
|
)
|
(2.3
|
)%
|
(3,042
|
)
|
(1.6
|
)%
|
(1,113
|
)
|
36.6
|
%
|
||||||||||||
Income before income taxes
|
8,199
|
4.5
|
%
|
9,821
|
5.2
|
%
|
(1,622
|
)
|
(16.5
|
)%
|
||||||||||||||
Income tax provision
|
(2,360
|
)
|
(1.3
|
)%
|
(3,325
|
)
|
(1.7
|
)%
|
965
|
29.0
|
%
|
|||||||||||||
Net income
|
$
|
5,839
|
3.2
|
%
|
$
|
6,496
|
3.4
|
%
|
$
|
(657
|
)
|
(10.1
|
)%
|
2015
|
2014
|
Reconciliation –
Constant $
|
||||||||||||||||||
GAAP
Measure:
Total $
|
Non-GAAP Measure:
Constant $
|
GAAP
Measure:
Total $
|
Dollar
|
Percent
|
||||||||||||||||
Net sales
|
180.3
|
192.1
|
$
|
190.1
|
2.0
|
1.1
|
% | |||||||||||||
Product
|
143.1
|
152.2
|
155.3
|
(3.1
|
)
|
(2.0
|
)%
|
|||||||||||||
Pack
|
31.7
|
34.1
|
27.8
|
6.3
|
22.7
|
% | ||||||||||||||
Other
|
5.5
|
5.8
|
7.0
|
(1.2
|
)
|
(17.1
|
)%
|
|||||||||||||
Gross profit
|
146.2
|
155.5
|
151.7
|
3.8
|
2.5
|
% | ||||||||||||||
Income from operations
|
12.1
|
13.6
|
12.7
|
0.9
|
7.1
|
% |
2015
|
2014
|
|||||||||||||||
North America
|
$
|
73.3
|
40.7
|
%
|
$
|
80.8
|
42.5
|
%
|
||||||||
Asia/Pacific
|
91.4
|
50.7
|
%
|
92.4
|
48.6
|
%
|
||||||||||
EMEA
|
15.6
|
8.6
|
%
|
16.9
|
8.9
|
%
|
||||||||||
Total
|
$
|
180.3
|
100.0
|
%
|
$
|
190.1
|
100.0
|
%
|
• | changes in our sales prices; |
• | changes in consumer demand; |
• | changes in the number of independent associates and members; |
• | changes in competitors’ products; |
• | changes in economic conditions; |
• | changes in regulations; |
• | announcements of new scientific studies and breakthroughs; |
• | introduction of new products; |
• | discontinuation of existing products; |
• | adverse publicity; |
• | changes in our commissions and incentives programs; |
• | direct competition; and |
• | fluctuations in foreign currency exchange rates. |
Change
|
||||||||||||||||
2015
|
2014
|
Dollar
|
Percentage
|
|||||||||||||
Consolidated product sales
|
$
|
143.1
|
$
|
155.3
|
$
|
(12.2
|
)
|
(7.9
|
)%
|
|||||||
Consolidated pack sales
|
31.7
|
27.8
|
3.9
|
14.0
|
%
|
|||||||||||
Consolidated other, including freight
|
5.5
|
7.0
|
(1.5
|
)
|
(21.4
|
)%
|
||||||||||
Total consolidated net sales
|
$
|
180.3
|
$
|
190.1
|
$
|
(9.8
|
)
|
(5.2
|
)%
|
Change | ||||||||||||||||
2015 |
2014
|
Dollar
|
Percentage
|
|||||||||||||
New
|
$
|
8.7
|
$
|
8.7
|
$
|
—
|
—
|
%
|
||||||||
Continuing
|
23.0
|
19.1
|
3.9
|
20.4
|
%
|
|||||||||||
Total
|
$
|
31.7
|
$
|
27.8
|
$
|
3.9
|
14.0
|
%
|
2015
|
2014 | |||||||||||||||
New
|
96,000
|
43.8
|
%
|
108,000
|
47.0
|
%
|
||||||||||
Continuing
|
123,000
|
56.2
|
%
|
122,000
|
53.0
|
%
|
||||||||||
Total
|
219,000
|
100.0
|
%
|
230,000
|
100.0
|
%
|
• | registered our most popular products with the appropriate regulatory agencies in all countries of operations; |
• | explored new international markets; |
• | continued to strengthen compliance initiatives; |
• | concentrated on publishing results of research studies and clinical trials related to our products; |
• | initiated additional incentives; |
• | explored new advertising and educational tools to broaden name recognition; and |
• | implemented changes to our global associate career and compensation plan. |
Country
|
2015
|
2014
|
||||||
Australia
|
30.0
|
%
|
30.0
|
%
|
||||
Canada
|
26.5
|
%
|
26.5
|
%
|
||||
Denmark
|
23.5
|
%
|
23.5
|
%
|
||||
Japan
|
37.1
|
%
|
37.1
|
%
|
||||
Mexico
|
30.0
|
%
|
30.0
|
%
|
||||
Norway
|
27.0
|
%
|
27.0
|
%
|
||||
Republic of Korea
|
22.0
|
%
|
22.0
|
%
|
||||
Singapore
|
17.0
|
%
|
17.0
|
%
|
||||
South Africa
|
28.0
|
%
|
28.0
|
%
|
||||
Sweden
|
22.0
|
%
|
22.0
|
%
|
||||
Switzerland
|
16.2
|
%
|
16.2
|
%
|
||||
Taiwan
|
17.0
|
%
|
17.0
|
%
|
||||
United Kingdom
|
20.3
|
%
|
21.0
|
%
|
||||
United States
|
37.5
|
%
|
37.5
|
%
|
||||
Cyprus
|
12.5
|
%
|
12.5
|
%
|
||||
Hong Kong
|
16.5
|
%
|
16.5
|
%
|
||||
Ukraine(1)
|
18.0
|
%
|
18.0
|
%
|
||||
Gibraltar
|
10.0
|
%
|
10.0
|
%
|
Country
|
2015
|
2014
|
||||||
Mexico
|
$
|
2.5
|
$
|
2.7
|
||||
Norway
|
—
|
0.1
|
||||||
Sweden
|
0.1
|
0.1
|
||||||
Switzerland
|
1.0
|
1.2
|
||||||
Taiwan
|
1.2
|
1.2
|
||||||
Ukraine
|
0.1
|
0.1
|
||||||
United States
|
4.0
|
4.3
|
||||||
Other Jurisdictions
|
0.1
|
—
|
||||||
Total
|
$
|
9.0
|
$
|
9.7
|
· | the timing of the introduction of new products and incentives; |
· | our ability to attract and retain associates and members; |
· | the timing of our incentives and contests; |
· | the general overall economic outlook; |
· | government regulations; |
· | the outcome of certain lawsuits; |
· | the perception and acceptance of network marketing; and |
· | the consumer perception of our products and overall operations. |
Provided by / (used in):
|
2015
|
2014
|
||||||
Operating activities
|
$
|
4.4
|
$
|
9.4
|
||||
Investing activities
|
$
|
(2.0
|
)
|
$
|
(1.5
|
)
|
||
Financing activities
|
$
|
0.1
|
$
|
(1.4
|
)
|
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
Total
|
||||||||||||||||||||||
Capital lease obligations
|
$
|
492
|
$
|
370
|
$
|
205
|
$
|
52
|
$
|
13
|
$
|
—
|
$
|
1,132
|
||||||||||||||
Purchase obligations(1)(2)
|
5,019
|
—
|
—
|
—
|
—
|
—
|
5,019
|
|||||||||||||||||||||
Operating leases
|
1,729
|
1,430
|
787
|
297
|
112
|
—
|
4,355
|
|||||||||||||||||||||
Note Payable and other financing arrangements
|
766
|
579
|
530
|
—
|
—
|
—
|
1,875
|
|||||||||||||||||||||
Employment agreements
|
1,503
|
—
|
—
|
—
|
—
|
—
|
1,503
|
|||||||||||||||||||||
Royalty agreement
|
52
|
59
|
59
|
59
|
59
|
7
|
295
|
|||||||||||||||||||||
Tax liability (3)
|
110
|
522
|
—
|
—
|
—
|
83
|
715
|
|||||||||||||||||||||
Other obligations(4)
|
314
|
164
|
49
|
49
|
97
|
769
|
1,442
|
|||||||||||||||||||||
Total commitments and obligations
|
$
|
9,985
|
$
|
3,124
|
$
|
1,630
|
$
|
457
|
$
|
281
|
$
|
859
|
$
|
16,336
|
(1) | For purposes of the table, a purchase obligation is defined as an agreement to purchase goods or services that is non-cancelable, enforceable and legally binding on the Company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. |
(2) | Excludes approximately $9.9 million of finished product purchase orders that may be cancelled or with delivery dates that have changed as of December 31, 2015. |
(3) | Represents the tax liability associated with uncertain tax positions, see Note 8 to our Consolidated Financial Statements, Income Taxes to our consolidated financial statements. |
(4) | Other obligations are composed of pension obligations related to the Company's international operations (approximately $1.0 million) and lease restoration obligations (approximately $0.4 million). |
Estimated useful life
|
Net carrying value at
December 31, 2015
|
|||||
Office furniture and equipment
|
5 to 7 years
|
$
|
0.5 million
|
|||
Computer hardware and software
|
3 to 5 years
|
2.1 million
|
||||
Automobiles
|
3 to 5 years
|
— million
|
||||
Leasehold improvements
|
2 to 10 years(1)
|
1.2 million
|
||||
Total net carrying value at December 31, 2015
|
$
|
3.8 million
|
Loyalty program
|
(in thousands)
|
|||
Loyalty deferred revenue as of January 1, 2014
|
$
|
5,456
|
||
Loyalty points forfeited
|
(4,664
|
)
|
||
Loyalty points used
|
(12,348
|
)
|
||
Loyalty points vested
|
19,580
|
|||
Loyalty points unvested
|
1,679
|
|||
Loyalty deferred revenue as of December 31, 2014
|
$
|
9,703
|
Loyalty deferred revenue as of January 1, 2015
|
$
|
9,703
|
||
Loyalty points forfeited
|
(8,801
|
)
|
||
Loyalty points used
|
(15,077
|
)
|
||
Loyalty points vested
|
20,403
|
|||
Loyalty points unvested
|
1,845
|
|||
Loyalty deferred revenue as of December 31, 2015
|
$
|
8,073
|
•
|
Retail Customer Product Return Policy. This policy allows a retail customer to return any of our products to the original associate who sold the product and receive a full cash refund from the associate for the first 180 days following the product’s purchase in the United States and Canada, and for the first 90 days following the product’s purchase in our remaining countries. The associate may then return or exchange the product based on the associate position product return policy.
|
•
|
Associate and Member Product Return Policy. This policy allows the associate or member to return an order within one year of the purchase date upon terminating his/her account. If an associate or member returns a product unopened and in good condition, he/she may receive a full refund minus a 10% restocking fee. We may also allow the associate or member to receive a full satisfaction guarantee refund, excluding promotional materials, if they have tried the product and are not satisfied for any reason. This satisfaction guarantee refund applies in the United States and Canada, only for the first 180 days following the product’s purchase, and applies in our remaining countries for the first 90 days following the product’s purchase; however, any commissions earned by an associate will be deducted from the refund. If we discover abuse of the refund policy, we have the right to terminate the associate’s or member’s account.
|
December 31, 2015
|
||||
Sales reserve as of January 1, 2015
|
$
|
207
|
||
Provision related to sales made in current period
|
1,456
|
|||
Adjustment related to sales made in prior periods
|
(10
|
)
|
||
Actual returns or credits related to current period
|
(1,319
|
)
|
||
Actual returns or credits related to prior periods
|
(187
|
)
|
||
Sales reserve as of December 31, 2015
|
$
|
147
|
2015 Grants
|
April
|
May
|
August
|
November
|
||||||||||||
Estimated fair value per share of options granted:
|
$
|
11.34
|
$
|
12.80
|
$
|
10.36
|
$
|
12.31
|
||||||||
Assumptions:
|
||||||||||||||||
Annualized dividend yield
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
||||||||
Risk-free rate of return
|
1.2
|
%
|
1.4
|
%
|
1.4
|
%
|
1.6
|
%
|
||||||||
Common stock price volatility
|
79.4
|
%
|
79.1
|
%
|
79.2
|
%
|
80.1
|
%
|
||||||||
Expected average life of stock options (in years)
|
4.5
|
4.5
|
4.5
|
4.5
|
Year ended December 31, 2015
|
As of
December 31, 2015
|
|||||||||||||||
Country (foreign currency name)
|
Low
|
High
|
Average
|
Spot
|
||||||||||||
Australia (Australian Dollar)
|
0.69196
|
0.82330
|
0.75291
|
0.72892
|
||||||||||||
Canada (Canadian Dollar)
|
0.71659
|
0.86220
|
0.78398
|
0.72132
|
||||||||||||
Czech Republic (Koruna)
|
0.03840
|
0.04380
|
0.04073
|
0.04050
|
||||||||||||
Denmark (Kroner)
|
0.14069
|
0.16310
|
0.14891
|
0.14644
|
||||||||||||
Hong Kong (Hong Kong Dollar)
|
0.12875
|
0.12904
|
0.12900
|
0.12903
|
||||||||||||
Japan (Yen)
|
0.00797
|
0.00857
|
0.00827
|
0.00830
|
||||||||||||
Mexico (Peso)
|
0.05751
|
0.06885
|
0.06322
|
0.05785
|
||||||||||||
New Zealand (New Zealand Dollar)
|
0.62709
|
0.78430
|
0.70104
|
0.68529
|
||||||||||||
Norway (Krone)
|
0.11406
|
0.13702
|
0.12444
|
0.11432
|
||||||||||||
Republic of Korea (Won)
|
0.00083
|
0.00094
|
0.00089
|
0.00085
|
||||||||||||
Singapore (Singapore Dollar)
|
0.69785
|
0.75781
|
0.72818
|
0.70729
|
||||||||||||
South Africa (Rand)
|
0.06302
|
0.08805
|
0.07896
|
0.06494
|
||||||||||||
Sweden (Krona)
|
0.11330
|
0.12900
|
0.11873
|
0.11920
|
||||||||||||
Switzerland (Franc)
|
0.97107
|
1.17090
|
1.04072
|
1.00928
|
||||||||||||
Taiwan (New Taiwan Dollar)
|
0.03005
|
0.03298
|
0.03155
|
0.03040
|
||||||||||||
United Kingdom (British Pound)
|
1.46339
|
1.58880
|
1.52916
|
1.48259
|
||||||||||||
Various countries (1) (Euro)
|
1.04993
|
1.21430
|
1.11076
|
1.09270
|
Index to Consolidated Financial Statements
|
F-1
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
F-3
|
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014
|
F-4
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2015 and 2014
|
F-4
|
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2015 and 2014
|
F-5
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014
|
F-6
|
Notes to Consolidated Financial Statements
|
F-7
|
MANNATECH, INCORPORATED
|
||
Dated: March 15, 2016
|
By:
|
/s/ Alfredo Bala
|
Alfredo Bala
|
||
Chief Executive Officer
|
||
(principal executive officer)
|
Dated: March 15, 2016
|
By:
|
/s/ David A. Johnson
|
David A. Johnson
|
||
Chief Accounting Officer
|
||
(principal financial officer)
|
Signature
|
Title
|
Date
|
||
/s/ Alfredo Bala
|
Chief Executive Officer
(principal executive officer)
|
March 15, 2016
|
||
Alfredo Bala
|
||||
/s/ David A. Johnson
|
Chief Accounting Officer
(principal financial officer)
|
March 15, 2016
|
||
David A. Johnson
|
||||
/s/ J. Stanley Fredrick
|
Chairman of the Board
|
March 15, 2016
|
||
J. Stanley Fredrick
|
||||
/s/ Robert A. Toth
|
Director
|
March 15, 2016
|
||
Robert A. Toth
|
||||
/s/ Gerald E. Gilbert
|
Director
|
March 15, 2016
|
||
Gerald E. Gilbert
|
||||
/s/ Marlin Ray Robbins
|
Director
|
March 15, 2016
|
||
Marlin Ray Robbins
|
||||
/s/ Larry A. Jobe
|
Director
|
March 15, 2016
|
||
Larry A. Jobe
|
||||
/s/ Linda K. Ferrell
|
Director
|
March 15, 2016
|
||
Linda K. Ferrell
|
||||
/s/ Eric W. Schrier
|
Director
|
March 15, 2016
|
||
Eric W. Schrier
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
F-3
|
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014
|
F-4
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2015 and 2014
|
F-4
|
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2015 and 2014
|
F-5
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014
|
F-6
|
Notes to Consolidated Financial Statements
|
F-7
|
December 31,
2015
|
December 31,
2014
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
31,994
|
$
|
27,999
|
||||
Restricted cash
|
1,511
|
1,511
|
||||||
Accounts receivable, net of allowance of $261 and $213 in 2015 and 2014, respectively
|
369
|
504
|
||||||
Income tax receivable
|
4
|
4
|
||||||
Inventories, net
|
9,199
|
10,591
|
||||||
Prepaid expenses and other current assets
|
2,905
|
3,069
|
||||||
Deferred commissions
|
3,443
|
4,544
|
||||||
Deferred tax assets, net
|
460
|
1,141
|
||||||
Total current assets
|
49,885
|
49,363
|
||||||
Property and equipment, net
|
3,848
|
2,481
|
||||||
Construction in progress
|
839
|
1,622
|
||||||
Long-term restricted cash
|
6,586
|
7,045
|
||||||
Other assets
|
3,759
|
3,567
|
||||||
Long-term deferred tax assets, net
|
3,725
|
3,320
|
||||||
Total assets
|
$
|
68,642
|
$
|
67,398
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current portion of capital leases
|
$
|
447
|
$
|
901
|
||||
Accounts payable
|
2,683
|
4,252
|
||||||
Accrued expenses
|
6,221
|
6,356
|
||||||
Commissions and incentives payable
|
6,818
|
7,908
|
||||||
Taxes payable
|
736
|
2,578
|
||||||
Current deferred tax liability
|
84
|
123
|
||||||
Current notes payable
|
713
|
—
|
||||||
Deferred revenue
|
8,677
|
10,890
|
||||||
Total current liabilities
|
26,379
|
33,008
|
||||||
Capital leases, excluding current portion
|
612
|
852
|
||||||
Long-term deferred tax liabilities
|
24
|
26
|
||||||
Long-term notes payable
|
1,069
|
—
|
||||||
Other long-term liabilities
|
1,994
|
2,136
|
||||||
Total liabilities
|
30,078
|
36,022
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding
|
—
|
—
|
||||||
Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,773,972 shares issued and 2,682,078 shares outstanding as of December 31, 2015 and 2,773,972 shares issued and 2,676,077 shares outstanding as of December 31, 2014
|
—
|
—
|
||||||
Additional paid-in capital
|
40,494
|
40,672
|
||||||
Retained earnings
|
8,589
|
2,750
|
||||||
Accumulated other comprehensive income (loss)
|
686
|
(109
|
)
|
|||||
Treasury stock, at average cost, 91,894 shares as of December 31, 2015 and 97,895 shares as of December 31, 2014, respectively
|
(11,205
|
)
|
(11,937
|
)
|
||||
Total shareholders’ equity
|
38,564
|
31,376
|
||||||
Total liabilities and shareholders’ equity
|
$
|
68,642
|
$
|
67,398
|
For the years ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Net sales
|
$
|
180,267
|
$
|
190,081
|
||||
Cost of sales
|
34,102
|
38,350
|
||||||
Gross profit
|
146,165
|
151,731
|
||||||
Operating expenses:
|
||||||||
Commissions and incentives
|
72,956
|
75,240
|
||||||
Selling and administrative expenses
|
34,458
|
36,193
|
||||||
Depreciation and amortization
|
1,793
|
1,608
|
||||||
Other operating costs
|
24,814
|
25,948
|
||||||
Total operating expenses
|
134,021
|
138,989
|
||||||
Income from operations
|
12,144
|
12,742
|
||||||
Interest income
|
210
|
121
|
||||||
Other expense, net
|
(4,155
|
)
|
(3,042
|
)
|
||||
Income before income taxes
|
8,199
|
9,821
|
||||||
Income tax provision
|
(2,360
|
)
|
(3,325
|
)
|
||||
Net income
|
$
|
5,839
|
$
|
6,496
|
||||
Earnings per common share:
|
||||||||
Basic
|
$
|
2.18
|
$
|
2.44
|
||||
Diluted
|
$
|
2.14
|
$
|
2.40
|
||||
Weighted-average common shares outstanding:
|
||||||||
Basic
|
2,680
|
2,663
|
||||||
Diluted
|
2,728
|
2,706
|
2015
|
2014
|
|||||||
Net income
|
$
|
5,839
|
$
|
6,496
|
||||
Foreign currency translations gain
|
815
|
653
|
||||||
Pension obligations, net of tax provision of $11 and $11 in 2015 and 2014, respectively
|
(20
|
)
|
(19
|
)
|
||||
Comprehensive income
|
$
|
6,634
|
$
|
7,130
|
Common
stock
|
Additional
paid in
capital
|
Retained
earnings
(deficit)
|
Accumulated
other
comprehensive
loss
|
Treasury
stock
|
Total
shareholders’
equity
|
|||||||||||||||||||
Balance at December 31, 2013
|
$
|
—
|
$
|
42,592
|
$
|
(3,746
|
)
|
$
|
(743
|
)
|
$
|
(14,651
|
)
|
$
|
23,452
|
|||||||||
Charge related to stock-based compensation
|
—
|
678
|
—
|
—
|
—
|
678
|
||||||||||||||||||
Stock option exercises
|
—
|
(2,630
|
)
|
—
|
—
|
2,714
|
84
|
|||||||||||||||||
Tax benefit from exercise of stock options
|
—
|
32
|
—
|
—
|
—
|
32
|
||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
653
|
—
|
653
|
||||||||||||||||||
Pension obligations, net of tax of $11
|
—
|
—
|
—
|
(19
|
)
|
—
|
(19
|
)
|
||||||||||||||||
Net income
|
—
|
—
|
6,496
|
—
|
—
|
6,496
|
||||||||||||||||||
Balance at December 31, 2014
|
$
|
—
|
$
|
40,672
|
$
|
2,750
|
$
|
(109
|
)
|
$
|
(11,937
|
)
|
$
|
31,376
|
||||||||||
Charge related to stock-based compensation
|
—
|
592
|
—
|
—
|
—
|
592
|
||||||||||||||||||
Stock option exercises
|
—
|
(704
|
)
|
—
|
—
|
732
|
28
|
|||||||||||||||||
Tax effect from exercise of stock options
|
—
|
(66
|
)
|
—
|
—
|
—
|
(66
|
)
|
||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
815
|
—
|
815
|
||||||||||||||||||
Pension obligations, net of tax of $11
|
—
|
—
|
—
|
(20
|
)
|
—
|
(20
|
)
|
||||||||||||||||
Net income
|
—
|
—
|
5,839
|
—
|
—
|
5,839
|
||||||||||||||||||
Balance at December 31, 2015
|
$
|
—
|
$
|
40,494
|
$
|
8,589
|
$
|
686
|
$
|
(11,205
|
)
|
$
|
38,564
|
For the years ended December 31,
|
||||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
5,839
|
$
|
6,496
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
1,793
|
1,608
|
||||||
Provision for inventory losses
|
480
|
2,124
|
||||||
Provision for doubtful accounts
|
369
|
579
|
||||||
(Gain) loss on disposal of assets
|
28
|
(9
|
)
|
|||||
Stock-based compensation expense
|
592
|
678
|
||||||
Deferred income taxes
|
88
|
(1,627
|
)
|
|||||
Tax expense (benefit) from exercise of stock options
|
66
|
(32
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(266
|
)
|
(713
|
)
|
||||
Inventories
|
605
|
970
|
||||||
Prepaid expenses and other current assets
|
462
|
945
|
||||||
Other assets
|
86
|
(170
|
)
|
|||||
Deferred commissions
|
1,031
|
(1,943
|
)
|
|||||
Accounts payable
|
(1,562
|
)
|
(709
|
)
|
||||
Accrued expenses and other liabilities
|
(392
|
)
|
854
|
|||||
Taxes payable
|
(1,819
|
)
|
803
|
|||||
Commissions and incentives payable
|
(969
|
)
|
(2,102
|
)
|
||||
Deferred revenue
|
(2,063
|
)
|
4,749
|
|||||
Change in restricted cash
|
18
|
(3,081
|
)
|
|||||
Net cash provided by operating activities
|
4,386
|
9,420
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Acquisition of property and equipment
|
(1,979
|
)
|
(1,534
|
)
|
||||
Proceeds from sale of assets
|
—
|
9
|
||||||
Net cash used in investing activities
|
(1,979
|
)
|
(1,525
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from stock options exercised
|
28
|
84
|
||||||
Tax benefit (expense) from exercise of stock options
|
—
|
32
|
||||||
Proceeds from note payable
|
1,640
|
—
|
||||||
Repayment of capital lease obligations
|
(1,526
|
)
|
(1,540
|
)
|
||||
Net cash provided (used) in financing activities
|
142
|
(1,424
|
)
|
|||||
Effect of currency exchange rate changes on cash and cash equivalents
|
1,446
|
1,133
|
||||||
Net increase in cash and cash equivalents
|
3,995
|
7,604
|
||||||
Cash and cash equivalents at the beginning of the year
|
27,999
|
20,395
|
||||||
Cash and cash equivalents at the end of the year
|
$
|
31,994
|
$
|
27,999
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Income taxes paid, net
|
$
|
4,659
|
$
|
4,253
|
||||
Interest paid on capital leases
|
$
|
89
|
$
|
119
|
||||
Summary of non-cash investing and financing activities:
|
||||||||
Assets acquired through financing arrangements
|
$
|
670
|
$
|
2,141
|
Estimated useful life
|
|
Office furniture and equipment
|
5 to 7 years
|
Computer hardware and software
|
3 to 5 years
|
Automobiles
|
3 to 5 years
|
Leasehold improvements(1)
|
2 to 10 years
|
Loyalty program
|
(in thousands)
|
|||
Loyalty deferred revenue as of January 1, 2014
|
$
|
5,456
|
||
Loyalty points forfeited
|
(4,664
|
)
|
||
Loyalty points used
|
(12,348
|
)
|
||
Loyalty points vested
|
19,580
|
|||
Loyalty points unvested
|
1,679
|
|||
Loyalty deferred revenue as of December 31, 2014
|
$
|
9,703
|
Loyalty deferred revenue as of January 1, 2015
|
$
|
9,703
|
||
Loyalty points forfeited
|
(8,801
|
)
|
||
Loyalty points used
|
(15,077
|
)
|
||
Loyalty points vested
|
20,403
|
|||
Loyalty points unvested
|
1,845
|
|||
Loyalty deferred revenue as of December 31, 2015
|
$
|
8,073
|
December 31, 2015
|
||||
Sales reserve as of January 1, 2015
|
$
|
207
|
||
Provision related to sales made in current period
|
1,456
|
|||
Adjustment related to sales made in prior periods
|
(10
|
)
|
||
Actual returns or credits related to current period
|
(1,319
|
)
|
||
Actual returns or credits related to prior periods
|
(187
|
)
|
||
Sales reserve as of December 31, 2015
|
$
|
147
|
2015
|
2014
|
|||||||||||||||
Sales by
product
|
% of total
net sales
|
Sales by
product
|
% of total
net sales
|
|||||||||||||
Advanced Ambrotose®
|
$
|
59,026
|
32.7
|
%
|
$
|
63,791
|
33.6
|
%
|
||||||||
Ambrotose®
|
9,686
|
5.4
|
%
|
10,895
|
5.7
|
%
|
||||||||||
NutriVerus™
|
8,541
|
4.7
|
%
|
10,530
|
5.5
|
%
|
||||||||||
PLUS™
|
8,239
|
4.6
|
%
|
8,923
|
4.7
|
%
|
||||||||||
Ūth™ Skin Rejuvenation
|
5,394
|
3.0
|
%
|
13,431
|
7.1
|
%
|
||||||||||
Total
|
$
|
90,886
|
50.4
|
%
|
$
|
107,571
|
56.6
|
%
|
2015
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets
|
||||||||||||||||
Money Market Funds – Fidelity, US
|
$
|
319
|
$
|
—
|
$
|
—
|
$
|
319
|
||||||||
Interest bearing deposits – various banks
|
14,134
|
—
|
—
|
14,134
|
||||||||||||
Total
|
$
|
14,453
|
$
|
—
|
$
|
—
|
$
|
14,453
|
||||||||
Amounts included in:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
8,281
|
$
|
—
|
$
|
—
|
$
|
8,281
|
||||||||
Restricted cash
|
737
|
—
|
—
|
737
|
||||||||||||
Long-term restricted cash
|
5,435
|
—
|
—
|
5,435
|
||||||||||||
Total
|
$
|
14,453
|
$
|
—
|
$
|
—
|
$
|
14,453
|
2014
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets
|
||||||||||||||||
Money Market Funds – Fidelity, US
|
$
|
392
|
$
|
—
|
$
|
—
|
$
|
392
|
||||||||
Interest bearing deposits – various banks
|
12,322
|
—
|
—
|
12,322
|
||||||||||||
Total
|
$
|
12,714
|
$
|
—
|
$
|
—
|
$
|
12,714
|
||||||||
Amounts included in:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
6,159
|
$
|
—
|
$
|
—
|
$
|
6,159
|
||||||||
Restricted cash
|
738
|
—
|
—
|
738
|
||||||||||||
Long-term restricted cash
|
5,817
|
—
|
—
|
5,817
|
||||||||||||
Total
|
$
|
12,714
|
$
|
—
|
$
|
—
|
$
|
12,714
|
2015
|
2014
|
|||||||
Raw materials
|
$
|
1,187
|
$
|
2,118
|
||||
Finished goods
|
9,277
|
10,615
|
||||||
Inventory reserves for obsolescence
|
(1,265
|
)
|
(2,142
|
)
|
||||
Total
|
$
|
9,199
|
$
|
10,591
|
2015
|
2014
|
|||||||
Office furniture and equipment
|
$
|
8,576
|
$
|
8,666
|
||||
Computer hardware
|
7,747
|
7,738
|
||||||
Computer software
|
47,724
|
46,791
|
||||||
Automobiles
|
81
|
81
|
||||||
Leasehold improvements
|
12,393
|
12,270
|
||||||
76,521
|
75,546
|
|||||||
Less accumulated depreciation and amortization
|
(72,673
|
)
|
(73,065
|
)
|
||||
Property and equipment, net
|
3,848
|
2,481
|
||||||
Construction in progress
|
839
|
1,622
|
||||||
Total
|
$
|
4,687
|
$
|
4,103
|
2016
|
$
|
492
|
||
2017
|
370
|
|||
2018
|
205
|
|||
2019
|
52
|
|||
2020
|
13
|
|||
Total future minimum lease payments
|
1,132
|
|||
Less: Amounts representing interest (effective interest rate 4.74%)
|
(73
|
)
|
||
Present value of minimum lease payments
|
1,059
|
|||
Current portion of capital lease obligations
|
447
|
|||
Long-term portion of capital lease obligations
|
$
|
612
|
2015
|
2014
|
|||||||
Accrued asset purchases
|
$
|
277
|
$
|
291
|
||||
Accrued compensation
|
1,620
|
2,180
|
||||||
Accrued royalties
|
68
|
105
|
||||||
Accrued sales and other taxes
|
2,323
|
1,193
|
||||||
Other accrued operating expenses
|
562
|
786
|
||||||
Customer deposits and sales returns
|
153
|
211
|
||||||
Accrued travel expenses related to corporate events
|
271
|
107
|
||||||
Accrued shipping and handling costs
|
257
|
344
|
||||||
Rent expense
|
76
|
147
|
||||||
Accrued legal and accounting fees
|
614
|
992
|
||||||
$
|
6,221
|
$
|
6,356
|
2015
|
2014
|
|||||||
United States
|
$
|
769
|
$
|
2,044
|
||||
Foreign
|
7,430
|
7,777
|
||||||
$
|
8,199
|
$
|
9,821
|
Current provision (benefit):
|
2015
|
2014
|
||||||
Federal
|
$
|
(336
|
)
|
$
|
2,433
|
|||
State
|
21
|
43
|
||||||
Foreign
|
2,518
|
2,547
|
||||||
2,203
|
5,023
|
|||||||
Deferred provision (benefit):
|
||||||||
Federal
|
191
|
(1,792
|
)
|
|||||
State
|
72
|
349
|
||||||
Foreign
|
(106
|
)
|
(255
|
)
|
||||
157
|
(1,698
|
)
|
||||||
$
|
2,360
|
$
|
3,325
|
2015
|
2014
|
|||||||
Federal statutory income taxes
|
35.0
|
%
|
35.0
|
%
|
||||
State income taxes, net of federal benefit
|
1.0
|
3.5
|
||||||
Difference in foreign and United States tax on foreign operations
|
(14.8
|
)
|
(16.1
|
)
|
||||
Effect of changes in valuation allowance for net operating loss carryforwards
|
(8.7
|
)
|
14.3
|
|||||
Effect of change in uncertain tax positions (net)
|
(0.2
|
)
|
0.5
|
|||||
Federal Sub-Part F Income from foreign operations
|
5.1
|
2.9
|
||||||
Foreign exchange
|
5.3
|
(0.3
|
)
|
|||||
Other
|
6.2
|
(5.9
|
)
|
|||||
28.9
|
%
|
33.9
|
%
|
Deferred tax assets:
|
2015
|
2014
|
||||||
Current:
|
||||||||
Deferred revenue
|
$
|
567
|
$
|
453
|
||||
Inventory capitalization
|
209
|
171
|
||||||
Inventory reserves
|
376
|
762
|
||||||
Accrued expenses
|
974
|
697
|
||||||
Other
|
205
|
127
|
||||||
Total current deferred tax assets
|
2,331
|
2,210
|
||||||
Noncurrent:
|
||||||||
Depreciation and amortization
|
1,788
|
1,867
|
||||||
Net operating loss(1)
|
5,378
|
5,842
|
||||||
Deferred royalty
|
16
|
28
|
||||||
Non-cash accounting charges related to stock options and warrants
|
684
|
628
|
||||||
Accrued expenses
|
239
|
350
|
||||||
Foreign tax credit carryover
|
3,568
|
3,855
|
||||||
Other
|
620
|
506
|
||||||
Total noncurrent deferred tax assets
|
12,293
|
13,076
|
||||||
Total deferred tax assets
|
14,624
|
15,286
|
||||||
Valuation allowance
|
(9,028
|
)
|
(9,745
|
)
|
||||
Total deferred tax assets, net of valuation allowance
|
$
|
5,596
|
$
|
5,541
|
||||
Deferred tax liabilities:
|
||||||||
Current:
|
||||||||
Prepaid expenses
|
$
|
406
|
$
|
413
|
||||
Deferred commissions
|
846
|
769
|
||||||
Other
|
—
|
10
|
||||||
Total current deferred tax liabilities
|
1,252
|
1,192
|
||||||
Noncurrent:
|
||||||||
Internally-developed software
|
266
|
11
|
||||||
Depreciation and amortization
|
1
|
2
|
||||||
Sub-Part F income deferred
|
—
|
—
|
||||||
Other
|
—
|
24
|
||||||
Total noncurrent deferred tax liabilities
|
267
|
37
|
||||||
Total deferred tax liabilities
|
$
|
1,519
|
$
|
1,229
|
Jurisdiction
|
Gross NOL
|
Tax Effected NOL
|
Expiration Years
|
|||||||||
Colombia
|
$
|
64
|
$
|
22
|
2019
|
|||||||
Mexico
|
8,482
|
2,545
|
2020-2024
|
|||||||||
Norway
|
249
|
67
|
Indefinite | |||||||||
Singapore
|
131
|
22
|
Indefinite | |||||||||
Sweden
|
513
|
113
|
Indefinite | |||||||||
Switzerland
|
11,371
|
1,028
|
2016-2020
|
|||||||||
Taiwan
|
7,133
|
1,213
|
2016-2024
|
|||||||||
Ukraine(1)
|
581
|
105
|
Indefinite | |||||||||
United States (states)
|
11,079
|
277
|
2016-2032
|
Country
|
2015
|
2014
|
||||||
Mexico
|
$
|
2.5
|
$
|
2.7
|
||||
Norway
|
—
|
0.1
|
||||||
Sweden
|
0.1
|
0.1
|
||||||
Switzerland
|
1.0
|
1.2
|
||||||
Taiwan
|
1.2
|
1.2
|
||||||
Ukraine(1)
|
0.1
|
0.1
|
||||||
United States
|
4.0
|
4.3
|
||||||
Other Jurisdictions
|
0.1
|
—
|
||||||
Total
|
$
|
9.0
|
$
|
9.7
|
2015
|
2014
|
|||||||
Current deferred tax assets
|
$
|
460
|
$
|
1,141
|
||||
Noncurrent deferred tax assets
|
3,725
|
3,320
|
||||||
Current deferred tax liabilities
|
(84
|
)
|
(123
|
)
|
||||
Other long-term liabilities
|
(24
|
)
|
(26
|
)
|
||||
Net deferred tax assets
|
$
|
4,077
|
$
|
4,312
|
2015
|
2014
|
|||||||
Balance as of January 1
|
$
|
803
|
$
|
738
|
||||
Additions for tax positions related to the current year
|
—
|
1
|
||||||
Additions for tax positions of prior years
|
—
|
111
|
||||||
Reductions of tax positions of prior years
|
(71
|
)
|
(47
|
)
|
||||
Settlements
|
(17
|
)
|
—
|
|||||
Balance as of December 31
|
$
|
715
|
$
|
803
|
Jurisdiction
|
Open Years
|
|||
Australia
|
2011-2015
|
|||
Canada
|
2011-2015
|
|||
Denmark
|
2012-2015
|
|||
Japan
|
2012-2015
|
|||
Mexico
|
2011-2015
|
|||
Norway
|
2009-2015
|
|||
Republic of Korea
|
2010-2015
|
|||
Singapore
|
2011-2015
|
|||
South Africa
|
2012-2015
|
|||
Sweden
|
2010-2015
|
|||
Switzerland
|
2010-2015
|
|||
Taiwan
|
2010-2015
|
|||
United Kingdom
|
2009-2015
|
|||
United States
|
2012-2015
|
· | Al Bala, the Company’s President; |
· | Chris Simons, the Company’s Regional Vice President EMEA/North America; |
· | Landen Fredrick, son of J. Stanley Fredrick, the Company’s Chairman of the Board and a major shareholder; and |
· | Lorrie Fry, the daughter of Larry Jobe (a member of our Board). |
2015
|
2014
|
|||||||
Sold Products
|
$
|
— million
|
$
|
0.3 million
|
||||
Contributed Cash Donations
|
$
|
— million
|
$
|
0.3 million
|
Projected benefit obligation:
|
2015
|
2014
|
||||||
Balance, beginning of year
|
$
|
549
|
$
|
629
|
||||
Service cost
|
75
|
88
|
||||||
Interest cost
|
3
|
3
|
||||||
Liability losses
|
(4
|
)
|
(6
|
)
|
||||
Benefits paid to participants
|
(141
|
)
|
(122
|
)
|
||||
Special termination benefit
|
—
|
34
|
||||||
Foreign currency
|
(3
|
)
|
(77
|
)
|
||||
Balance, end of year
|
$
|
479
|
$
|
549
|
||||
Plan assets:
|
2015
|
2014
|
||||||
Fair value, beginning of year
|
$
|
—
|
$
|
—
|
||||
Company contributions
|
141
|
122
|
||||||
Benefits paid to participants
|
(141
|
)
|
(122
|
)
|
||||
Fair value, end of year
|
$
|
—
|
$
|
—
|
Funded status of the Benefit Plan as of December 31 (in thousands):
|
2015
|
2014
|
||||||
Benefit obligation
|
$
|
(479
|
)
|
$
|
(549
|
)
|
||
Fair value of plan assets
|
—
|
—
|
||||||
Excess of benefit obligation over fair value of plan assets
|
$
|
(479
|
)
|
$
|
(549
|
)
|
Amounts recognized in the accompanying Consolidated Balance Sheets consist of, as of December 31 (in thousands):
|
2015
|
2014
|
||||||
Accrued benefit liability
|
$
|
(479
|
)
|
$
|
(549
|
)
|
||
Transition obligation and unrealized gain
|
(339
|
)
|
(372
|
)
|
||||
Net amount recognized in the consolidated balance sheets
|
$
|
(818
|
)
|
$
|
(921
|
)
|
Years Ended December 31,
|
||||||||
Other changes recognized in comprehensive income (loss) (in thousands):
|
2015
|
2014
|
||||||
Net periodic cost
|
$
|
43
|
$
|
85
|
||||
Current year gain
|
(4
|
)
|
(6
|
)
|
||||
Amortization of transition obligation
|
(4
|
)
|
(4
|
)
|
||||
Total recognized in other comprehensive income (loss)
|
(8
|
)
|
(10
|
)
|
||||
Total recognized in comprehensive income (loss)
|
$
|
35
|
$
|
75
|
As of December 31,
|
||||||||
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain (loss) (in thousands):
|
2015
|
2014
|
||||||
Transition obligation
|
$
|
22
|
$
|
13
|
||||
Prior service cost
|
313
|
353
|
||||||
Net actuarial gain
|
4
|
6
|
||||||
Total recognized in accumulated other comprehensive gain (loss)
|
$
|
339
|
$
|
372
|
2016 estimated amounts of amortized transition obligation (in thousands):
|
2016
|
|||
Transition obligation
|
$
|
(4
|
)
|
As of December 31,
|
||||||||
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets (in thousands):
|
2015
|
2014
|
||||||
Projected benefit obligation
|
$
|
479
|
$
|
549
|
||||
Accumulated benefit obligation
|
479
|
549
|
||||||
Fair value of plan assets
|
—
|
—
|
2015
|
2014
|
|||||||
Discount rate
|
0.40
|
%
|
0.50
|
%
|
||||
Rate of increase in compensation levels
|
—
|
%
|
—
|
%
|
2015
|
2014
|
|||||||
Service cost
|
$
|
75
|
$
|
88
|
||||
Interest cost
|
3
|
3
|
||||||
Amortization of transition obligation
|
4
|
4
|
||||||
Gain
|
—
|
—
|
||||||
Special termination
|
—
|
34
|
||||||
Prior service cost
|
(39
|
)
|
(44
|
)
|
||||
Benefit adjustment
|
—
|
—
|
||||||
Total pension expense
|
$
|
43
|
$
|
85
|
2016
|
$
|
53
|
||
2017
|
52
|
|||
2018
|
49
|
|||
2019
|
49
|
|||
2020
|
43
|
|||
Next five years
|
368
|
|||
Total expected benefits to be paid
|
$
|
614
|
2015
|
||||||||||||||||
Number of
Options
(in thousands)
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
life
(in years)
|
Aggregate
intrinsic
value (in
thousands)
|
|||||||||||||
Outstanding at beginning of year
|
249
|
16.71
|
||||||||||||||
Granted
|
37
|
19.18
|
||||||||||||||
Exercised
|
(5
|
)
|
5.72
|
|||||||||||||
Forfeited or expired
|
(55
|
)
|
19.78
|
|||||||||||||
Outstanding at end of year
|
226
|
16.61
|
7.09
|
505
|
||||||||||||
Options exercisable at year end
|
148
|
16.95
|
6.34
|
282
|
2015
|
2014
|
|||||||
Dividend yield:
|
—
|
(1)
|
—
|
(1)
|
||||
Risk-free interest rate:
|
1.2 – 1.6
|
%
|
1.3 - 1.5
|
%
|
||||
Expected market price volatility:
|
79.1 – 80.1
|
%
|
77.1 – 80.5
|
%
|
||||
Average expected life of stock options:
|
4.5 years
|
4.5 years
|
2015
|
2014
|
|||||||
Selling, general and administrative expenses and income from operations before income taxes
|
$
|
575
|
$
|
512
|
||||
Benefit for income taxes
|
(137
|
)
|
(137
|
)
|
||||
Effect on net income
|
$
|
438
|
$
|
375
|
Total gross unrecognized
compensation expense
|
Total tax benefit associated
with unrecognized
compensation expense
|
Total net
unrecognized
compensation expense
|
||||||||||
2016
|
$
|
352
|
$
|
54
|
$
|
298
|
||||||
2017
|
176
|
18
|
158
|
|||||||||
2018
|
99
|
—
|
99
|
|||||||||
$
|
627
|
$
|
72
|
$
|
555
|
Years ending December 31,
|
||||
2016
|
$
|
1,729
|
||
2017
|
1,430
|
|||
2018
|
787
|
|||
2019
|
297
|
|||
2020
|
112
|
|||
Thereafter
|
—
|
|||
$
|
4,355
|
Foreign
Currency
Translation
|
Pension
Postretirement
Benefit
Obligation
|
Accumulated
Other
Comprehensive
Loss, Net
|
||||||||||
Balance as of December 31, 2014
|
$
|
(457
|
)
|
$
|
348
|
$
|
(109
|
)
|
||||
Current-period change before reclassifications
|
815
|
—
|
815
|
|||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
(31
|
)
|
(31
|
)
|
|||||||
Income tax provision
|
—
|
11
|
11
|
|||||||||
Balance as of December 31, 2015
|
$
|
358
|
$
|
328
|
$
|
686
|
Region
|
2015
|
2014
|
||||||||||||||
North America
|
$
|
73.3
|
40.7
|
%
|
$
|
80.8
|
42.5
|
%
|
||||||||
Asia/Pacific
|
91.4
|
50.7
|
%
|
92.4
|
48.6
|
%
|
||||||||||
EMEA
|
15.6
|
8.6
|
%
|
16.9
|
8.9
|
%
|
||||||||||
Total
|
$
|
180.3
|
100.0
|
%
|
$
|
190.1
|
100.0
|
%
|
2015
|
2014
|
|||||||
Consolidated product sales
|
$
|
143.1
|
$
|
155.3
|
||||
Consolidated pack sales
|
31.7
|
27.8
|
||||||
Consolidated other, including freight
|
5.5
|
7.0
|
||||||
Total
|
$
|
180.3
|
$
|
190.1
|
Region
|
2015
|
2014
|
||||||
North America
|
$
|
3.5
|
$
|
3.1
|
||||
Asia/Pacific
|
1.1
|
0.8
|
||||||
EMEA
|
0.1
|
0.2
|
||||||
Total
|
$
|
4.7
|
$
|
4.1
|
Region
|
2015
|
2014
|
||||||
North America
|
$
|
3.4
|
$
|
4.0
|
||||
Asia/Pacific
|
4.3
|
4.3
|
||||||
EMEA
|
1.5
|
2.3
|
||||||
Total
|
$
|
9.2
|
$
|
10.6
|
Incorporated by Reference
|
|||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit (s)
|
Filing Date
|
3.1
|
Amended and Restated Articles of Incorporation of Mannatech, dated May 19, 1998.
|
S-1
|
333-63133
|
3.1
|
October 28, 1998
|
3.2
|
Amendment to the Amended and Restated Articles of Incorporation of Mannatech, dated January 13, 2012.
|
8-K
|
000-24657
|
3.1
|
January 17, 2012
|
3.3
|
Fifth Amended and Restated Bylaws of Mannatech, effective August 25, 2014.
|
8-K
|
000-24657
|
3.1
|
August 27, 2014
|
4.1
|
Specimen Certificate representing Mannatech’s common stock, par value $0.0001 per share.
|
S-1
|
333-63133
|
4.1
|
October 28, 1998
|
10.1
|
Amended and Restated 1997 Stock Option Plan, dated August 7, 2004.
|
10-K
|
000-24657
|
10.1
|
March 15, 2004
|
10.2
|
2008 Stock Incentive Plan, as amended.
|
S-8
|
333-197400
|
4.4
|
July 14, 2014
|
10.3
|
Investment Agreement by and between Mannatech and Dutchess Opportunity Fund, II, LP dated September 16, 2010.
|
8-K
|
000-24657
|
10.1
|
September 21, 2010
|
10.4
|
Amendment to Investment Agreement, dated as of October 4, 2010, by and between Mannatech and Dutchess Opportunity Fund, II, LP.
|
8-K
|
000-24657
|
10.1
|
October 5, 2010
|
10.5
|
Amended and Restated 1998 Incentive Stock Option Plan, dated August 7, 2004.
|
10-K
|
000-24657
|
10.1
|
March 15, 2004
|
10.6
|
Registration Rights Agreement by and between Mannatech and Dutchess Opportunity Fund, II, LP dated September 16, 2010.
|
8-K
|
000-24657
|
10.2
|
September 21, 2010
|
10.7
|
Amended and Restated 2000 Option Plan, dated August 7, 2004.
|
10-K
|
000-24657
|
10.1
|
March 15, 2004
|
10.8
|
Form of Indemnification Agreement between Mannatech and each member of the Board of Directors of Mannatech Korea Ltd., dated March 3, 2004.
|
10-Q
|
000-24657
|
10.2
|
August 9, 2004
|
10.9
|
Form of Indemnification Agreement between Mannatech and each of the following directors: J. Stanley Fredrick, Patricia Wier, Alan D. Kennedy, Gerald E. Gilbert, Marlin Ray Robbins, Larry A. Jobe, and Robert A. Toth.
|
10-Q
|
000-24657
|
10.4
|
November 4, 2010
|
10.10
|
Commercial Lease Agreement between Mannatech and MEPC Quorum Properties II Inc., dated November 7, 1996, as amended by the First Amendment thereto dated May 29, 1997 and the Second Amendment thereto dated November 13, 1997.
|
S-1
|
333-63133
|
10.13
|
September 10, 1998
|
10.11
|
Second Amendment to the Commercial Lease Agreement between Mannatech and Texas Dugan Limited Partnership, dated September 22, 2005.
|
10-Q
|
000-24657
|
10.1
|
November 9, 2005
|
10.12
|
Commercial Lease Agreement between Mannatech and MEPC Quorum Properties II Inc., dated May 29, 1997 as amended by the First Amendment thereto dated November 6, 1997.
|
S-1
|
333-63133
|
10.14
|
September 10, 1998
|
10.13
|
Third Amendment to the Commercial Lease Agreement between Mannatech and Texas Dugan Limited Partnership, dated September 22, 2005.
|
10-Q
|
000-24657
|
10.2
|
November 9, 2005
|
10.14
|
Trademark License and Supply Agreement between Mannatech and Carrington Laboratories, Inc., dated January 25, 2007. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
8-K
|
000-24657
|
10.1
|
January 31, 2007
|
10.15
|
Supply Agreement between Mannatech and Natural Aloe de Costa Rica, S.A. dated April 1, 2012 (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
8-K
|
000-24657
|
10.1
|
May 3, 2011
|
10.16
|
Supply Agreement between Mannatech (International) Limited and Marinova Pty. Limited, effective August 9, 2007 and dated May 7, 2007. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-Q
|
000-24657
|
10.3
|
May 10, 2007
|
Incorporated by Reference
|
|||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit (s)
|
Filing Date
|
10.17
|
Amendment to Purchase Agreement between Mannatech and Marinova PTY, Limited, dated May 6, 2008. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-Q
|
000-24657
|
10.4
|
August 11, 2008
|
10.18
|
Purchase Agreement between Mannatech and Larex, Inc., dated January 1, 2006. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-K
|
000-24657
|
10.18
|
March 16, 2006
|
10.19
|
Purchase Agreement between Mannatech and Wellness Enterprises, LLC, dated February 1, 2006. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-K
|
000-24657
|
10.19
|
March 16, 2006
|
10.20
|
Supply Agreement between Mannatech and Coradji PTY. Limited, dated March 29, 2004. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-Q/A
|
000-24657
|
10.1
|
March 29, 2005
|
10.21
|
Supply License Agreement between Mannatech and InB:Biotechnologies, Inc., dated March 22, 2006. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-Q
|
000-24657
|
10.2
|
May 10, 2006
|
10.22
|
Initial Commercial Supply and Manufacturing Agreement between Mannatech and Fine Chemetics, Inc., dated March 29, 2006. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
10-Q
|
000-24657
|
10.3
|
May 10, 2006
|
10.23
|
Supply Agreement between Mannatech, Incorporated, and Improve U.S.A., Inc., effective June 1, 2008, and executed May 2, 2008. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
8-K
|
000-24657
|
10.1
|
May 8, 2008
|
10.24
|
Amendment to Supply Agreement between Mannatech and Improve U.S.A., dated June 1, 2011. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
8-K
|
000-24657
|
10.1
|
August 22, 2011
|
10.25
|
Services Agreement by and between Integrated Distribution and Logistics Direct, LLC and Mannatech dated July 2, 2012 (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
8-K
|
000-24657
|
10.1
|
July 9, 2012
|
10.26
|
Sublease by and between Integrated Distribution and Logistics Direct, LLC and Mannatech, dated July 2, 2012. (Portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act.)
|
8-K
|
000-24657
|
10.2
|
July 9, 2012
|
10.27
|
Amended and Restated Employment Agreement between Terry L. Persinger and Mannatech, dated June 16, 2008.
|
8-K
|
000-24657
|
10.1
|
June 20, 2008
|
10.28
|
Employment Agreement between Robert A. Sinnott, Ph.D. and Mannatech, dated October 5, 2007.
|
8-K
|
000-24657
|
10.3
|
October 11, 2007
|
10.29
|
Employment Agreement between Mannatech and Mr. Samuel L. Caster, dated January 23, 2006.
|
10-K
|
000-24657
|
10.32
|
March 16, 2006
|
10.30
|
Employment Agreement between Stephen D. Fenstermacher and Mannatech, dated October 5, 2007.
|
8-K
|
000-24657
|
10.2
|
October 11, 2007
|
10.31
|
First Amendment to Employment Agreement between Stephen D. Fenstermacher and Mannatech, dated December 18, 2008.
|
10-K
|
000-24657
|
10.24
|
March 12, 2009
|
10.32
|
Mutual Severance and Release Agreement by and between Stephen D. Fenstermacher and Mannatech, dated March 12, 2012
|
10-Q
|
000-24657
|
10.1
|
May 10, 2012
|
10.33
|
Employment Agreement between Terence L. O’Day and Mannatech, dated October 5, 2007.
|
8-K
|
000-24657
|
10.1
|
October 11, 2007
|
Incorporated by Reference
|
||||||||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit (s)
|
Filing Date
|
|||||
10.34
|
Employment Agreement between B. Keith Clark and Mannatech, dated October 5, 2007.
|
8-K
|
000-24657
|
10.4
|
October 11, 2007
|
|||||
10.35
|
Employment Agreement between Wayne L. Badovinus and Mannatech, dated June 4, 2008.
|
8-K
|
000-24657
|
10.1
|
June 9, 2008
|
|||||
10.36
|
Employment Agreement between Terri F. Maxwell and Mannatech, dated August 28, 2008.
|
8-K
|
000-24657
|
10.1
|
September 2, 2008
|
|||||
10.37
|
Lock-up Agreement between Mannatech and J. Stanley Fredrick, dated November 6, 2003.
|
10-K
|
000-24657
|
10.36
|
March 15, 2004
|
|||||
10.38
|
Termination of Lock-up Agreement between Mannatech and J. Stanley Fredrick, dated March 6, 2009.
|
8-K
|
000-24657
|
10.1
|
March 10, 2009
|
|||||
10.39
|
Follow-Up Agreement to Letter of Intent Agreement between Mannatech and Jett, dated September 10, 2001.
|
10-Q
|
000-24657
|
10.4
|
November 14, 2001
|
|||||
10.40
|
Letter of Understanding between Mannatech and Dr. John Axford, dated April 19, 2006.
|
8-K
|
000-24657
|
99.1
|
April 21, 2006
|
|||||
10.41
|
Extension of the Letter of Spokesperson Arrangement between Mannatech and Dr. John Axford, dated February 18, 2007.
|
8-K
|
000-24657
|
99.1
|
February 21, 2007
|
|||||
10.42
|
Employment Agreement between Alfredo Bala and Mannatech, effective October 1, 2007, dated September 18, 2007.
|
8-K
|
000-24657
|
10.1
|
September 24, 2007
|
|||||
10.43
|
Amendment to Employment Agreement between Alfredo Bala and Mannatech, dated October 11, 2007.
|
8-K
|
000-24657
|
10.1
|
October 17, 2007
|
|||||
10.44
|
Clinical Research Agreement dated January 3, 2007 by and between St. George’s Hospital Medical School (trading as St George’s, University of London), and Mannatech, Inc.
|
10-K
|
000-24657
|
10.39
|
March 17,2008
|
|||||
10.45
|
Employment Agreement, effective March 2, 2009, by and between Mannatech and Randy S. Bancino.
|
8-K
|
000-24657
|
10.1
|
March 6, 2009
|
|||||
10.46
|
First Amendment to Employment Agreement, dated as of December 16, 2009, by and between Mannatech and Randy S. Bancino.
|
8-K
|
000-24657
|
10.4
|
December 18, 2009
|
|||||
10.47
|
Consulting Agreement, dated March 17, 2009, between Mannatech and Salinda Enterprises, LLC and Samuel L. Caster.
|
8-K
|
000-24657
|
10.1
|
March 19, 2009
|
|||||
10.48
|
Consulting Agreement, dated December 1, 2011, by and between Mannatech and WonderEnterprises, LLC (f/k/a Salinda Enterprises, LLC) and Samuel L. Caster.
|
10-K
|
000-24657
|
10.46
|
March 29, 2012
|
|||||
10.49
|
Consulting Agreement, effective January 1, 2013, by and between Mannatech and WonderEnterprises, LLC and Samuel L. Caster, dated March 6, 2013.
|
10-K
|
000-24657
|
10.51
|
March 28, 2013
|
|||||
10.50
|
Consulting Agreement, effective June 1, 2013, by and between Mannatech and WonderEnterprises, LLC and Samuel L. Caster, dated June 3, 2013.
|
8-K
|
000-24657
|
10.1
|
June 4, 2013
|
|||||
10.51
|
Consulting Agreement, effective as of December 1, 2013, by and between Mannatech and WonderEnterprises, LLC.
|
8-K
|
000-24657
|
10.1
|
December 1, 2013
|
|||||
10.52
|
Separation and Release Agreement, dated July 17, 2009 between Mannatech and Terri F. Maxwell.
|
8-K
|
000-24657
|
10.1
|
July 21, 2009
|
|||||
10.53
|
Second Amendment to Employment Agreement, dated as of December 16, 2009, by and between Mannatech and Stephen D. Fenstermacher.
|
8-K
|
000-24657
|
10.1
|
December 18, 2009
|
|||||
10.54
|
Second Amendment to Employment Agreement, dated as of December 16, 2009, by and between Mannatech and Robert A. Sinnott, Ph.D.
|
8-K
|
000-24657
|
10.2
|
December 18, 2009
|
|||||
10.55
|
Second Amendment to Employment Agreement, dated as of December 16, 2009, by and between Mannatech and B. Keith Clark.
|
8-K
|
000-24657
|
10.3
|
December 18, 2009
|
|||||
10.56
|
Separation Agreement and Release, dated March 20, 2013, by and between Mannatech and B. Keith Clark.
|
8-K
|
000-24657
|
10.1
|
March 25, 2013
|
|||||
10.57
|
Employment Agreement, dated March 4, 2013, by and between Mannatech and Roy Truett.
|
8-K
|
000-24657
|
10.1
|
March 6, 2013
|
|||||
10.58
|
Separation Agreement and General Release, dated January 30, 2014, by and between Mannatech and Roy Truett.
|
10-K
|
000-24657
|
10.60
|
March 18, 2014
|
|||||
10.59
|
Executive Service Agreement between Mannatech Korea, Ltd. and Yong Jae (Patrick) Park, dated October 1, 2009.
|
10-Q
|
000-24657
|
10.1
|
May 12, 2015
|
|||||
10.60
|
First Amendment to Employment Agreement between Mannatech Incorporated and Robert A. Sinnott, MNS, PhD, dated December 18, 2008.
|
10-Q
|
000-24657
|
10.2
|
May 12, 2015
|
|||||
14.1
|
Code of Ethics.
|
10-K
|
000-24657
|
14.1
|
March 16, 2007
|
|||||
List of Subsidiaries.
|
*
|
*
|
*
|
*
|
||||||
Consent of BDO USA, LLP.
|
*
|
*
|
*
|
*
|
||||||
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule.
|
*
|
*
|
*
|
*
|
||||||
24*
|
Power of Attorney, which is included on the signature page of this annual report on Form 10-K.
|
*
|
*
|
*
|
*
|
|||||
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer of Mannatech.
|
*
|
*
|
*
|
*
|
||||||
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Chief Financial Officer of Mannatech.
|
*
|
*
|
*
|
*
|
||||||
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer of Mannatech.
|
*
|
*
|
*
|
*
|
Incorporated by Reference
|
|||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit (s)
|
Filing Date
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Financial Officer of Mannatech.
|
*
|
*
|
*
|
*
|
|
Financial Statement Schedule Regarding Valuation and Qualifying Accounts.
|
*
|
*
|
*
|
*
|
|
99.2* | Press release, dated November 10, 2015, entitled "Mannatech Reports Third Quarter 2015 Results". | * | * | * | * |
101.INS**
|
XBRL Instance Document
|
**
|
**
|
**
|
**
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
**
|
**
|
**
|
**
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
**
|
**
|
**
|
**
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
**
|
**
|
**
|
**
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
**
|
**
|
**
|
**
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
**
|
**
|
**
|
**
|
1.
|
Mannatech Australia Pty Limited
|
2.
|
Mannatech Japan, G.K.
|
3.
|
Mannatech Korea, Ltd.
|
4.
|
Mannatech Limited (a New Zealand Company)
|
5.
|
Mannatech Limited (a UK Company)
|
6.
|
Mannatech Taiwan Corporation
|
7.
|
Mannatech Payment Services Incorporated
|
8.
|
Mannatech Products Company Inc.
|
9.
|
Internet Health Group, Inc.
|
10.
|
Mannatech (International) Limited
|
11.
|
Mannatech, Incorporated Malaysia Sdn. Bhd.
|
12.
|
Mannatech Singapore Pte. Ltd.
|
13.
|
Mannatech Canada Corporation
|
14.
|
Mannatech South Africa (Pty) Ltd
|
15.
|
Mannatech Bermuda Holdings Limited
|
16.
|
Mannatech Denmark ApS
|
17.
|
Mannatech (Gibraltar) Holdings Limited
|
18.
|
Mannatech Swiss Holdings GmbH
|
19.
|
Mannatech Swiss International GmbH
|
20.
|
Mannatech Malaysia Trading Co. Sdn. Bhd.
|
21.
|
Mannatech Norge A/S
|
22.
|
Mannatech Sverige AB
|
23.
|
MTEX Mexico SRL CV
|
24.
|
MTEX Mexico Services SRL CV
|
25.
|
Mannatech Cyprus Limited
|
26.
|
Mannatech Ukraine LLC
|
27.
|
MTEX Hong Kong Limited
|
28.
|
Mannatech Colombia SAS
|
Date: March 15, 2016
|
/s/ Alfredo Bala
|
|
Alfredo Bala
|
||
Chief Executive Officer
|
||
(principal executive officer)
|
Date: March 15, 2016
|
/s/ David A. Johnson
|
|
David A. Johnson
|
||
Chief Accounting Officer
|
||
(principal financial officer)
|
Date: March 15, 2016
|
/s/ Alfredo Bala
|
|
Alfredo Bala
|
||
Chief Executive Officer
|
||
(principal executive officer)
|
Date: March 15, 2016
|
/s/ David A. Johnson
|
|
David A. Johnson
|
||
Chief Accounting Officer
|
||
(principal financial officer)
|
Additions
|
||||||||||||||||||||
Balance at
Beginning of
Year
|
Charged to
Costs and
Expenses
|
Charged to
other
Accounts
|
Deductions
|
Balance at
End of Year
|
||||||||||||||||
Year Ended December 31, 2014
|
||||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$
|
142
|
579
|
—
|
(508
|
)
|
$
|
213
|
||||||||||||
Allowance for obsolete inventories
|
$
|
2,009
|
2,124
|
—
|
(1,991
|
)
|
$
|
2,142
|
||||||||||||
Valuation allowance for deferred tax assets
|
$
|
5,264
|
5,344
|
—
|
(863
|
)
|
$
|
9,745
|
||||||||||||
Included in accrued expenses:
|
||||||||||||||||||||
Reserve for sales returns
|
$
|
238
|
1,628
|
—
|
(1,659
|
)
|
$
|
207
|
||||||||||||
Year Ended December 31, 2015
|
||||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$
|
213
|
369
|
—
|
(321
|
)
|
$
|
261
|
||||||||||||
Allowance for obsolete inventories
|
$
|
2,142
|
480
|
—
|
(1,357
|
)
|
$
|
1,265
|
||||||||||||
Valuation allowance for deferred tax assets
|
$
|
9,745
|
180
|
—
|
(897
|
)
|
$
|
9,028
|
||||||||||||
Included in accrued expenses:
|
||||||||||||||||||||
Reserve for sales returns
|
$
|
207
|
1,446
|
—
|
(1,506
|
)
|
$
|
147
|
ASSETS
|
September 30,
2015
(unaudited)
|
December 31,
2014
|
||||||
Cash and cash equivalents
|
$
|
35,292
|
$
|
27,999
|
||||
Restricted cash
|
1,512
|
1,511
|
||||||
Accounts receivable, net
|
272
|
504
|
||||||
Income tax receivable
|
20
|
4
|
||||||
Inventories, net
|
11,398
|
10,591
|
||||||
Prepaid expenses and other current assets
|
2,981
|
3,069
|
||||||
Deferred commissions
|
4,210
|
4,544
|
||||||
Deferred tax assets, net
|
1,026
|
1,141
|
||||||
Total current assets
|
56,711
|
49,363
|
||||||
Property and equipment, net
|
4,092
|
2,481
|
||||||
Construction in progress
|
660
|
1,622
|
||||||
Long-term restricted cash
|
6,459
|
7,045
|
||||||
Other assets
|
3,943
|
3,567
|
||||||
Long-term deferred tax assets, net
|
3,468
|
3,320
|
||||||
Total assets
|
$
|
75,333
|
$
|
67,398
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current portion of capital leases
|
$
|
446
|
$
|
901
|
||||
Accounts payable
|
4,339
|
4,252
|
||||||
Accrued expenses
|
7,804
|
6,356
|
||||||
Commissions and incentives payable
|
9,840
|
7,908
|
||||||
Taxes payable
|
1,822
|
2,578
|
||||||
Current deferred tax liability
|
119
|
123
|
||||||
Deferred revenue
|
10,459
|
10,890
|
||||||
Total current liabilities
|
34,829
|
33,008
|
||||||
Capital leases, excluding current portion
|
699
|
852
|
||||||
Long-term deferred tax liabilities
|
64
|
26
|
||||||
Other long-term liabilities
|
3,127
|
2,136
|
||||||
Total liabilities
|
38,719
|
36,022
|
||||||
Shareholders’ equity:
|
||||||||
Preferred stock
|
—
|
—
|
||||||
Common stock
|
—
|
—
|
||||||
Additional paid-in capital
|
40,435
|
40,672
|
||||||
Retained earnings
|
7,060
|
2,750
|
||||||
Accumulated other comprehensive income (loss)
|
323
|
(109
|
)
|
|||||
Treasury stock
|
(11,204
|
)
|
(11,937
|
)
|
||||
Total shareholders’ equity
|
36,614
|
31,376
|
||||||
Total liabilities and shareholders’ equity
|
$
|
75,333
|
$
|
67,398
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net sales
|
$
|
43,860
|
$
|
55,635
|
$
|
134,956
|
$
|
144,900
|
||||||||
Cost of sales
|
8,253
|
10,304
|
25,076
|
29,440
|
||||||||||||
Gross profit
|
35,607
|
45,331
|
109,880
|
115,460
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Commissions and incentives
|
17,867
|
20,977
|
54,296
|
57,727
|
||||||||||||
Selling and administrative
|
9,001
|
9,567
|
26,412
|
26,389
|
||||||||||||
Depreciation and amortization
|
433
|
441
|
1,324
|
1,248
|
||||||||||||
Other operating costs
|
6,072
|
6,149
|
18,493
|
19,920
|
||||||||||||
Total operating expenses
|
33,373
|
37,134
|
100,525
|
105,284
|
||||||||||||
Income from operations
|
2,234
|
8,197
|
9,355
|
10,176
|
||||||||||||
Interest income
|
93
|
25
|
154
|
61
|
||||||||||||
Other expense, net
|
(2,418
|
)
|
(1,167
|
)
|
(3,802
|
)
|
(1,311
|
)
|
||||||||
Income (loss) before income taxes
|
(91
|
)
|
7,055
|
5,707
|
8,926
|
|||||||||||
(Provision) benefit for income taxes
|
159
|
(1,947
|
)
|
(1,397
|
)
|
(4,282
|
)
|
|||||||||
Net income
|
$
|
68
|
$
|
5,108
|
$
|
4,310
|
$
|
4,644
|
||||||||
Earnings per common share:
|
||||||||||||||||
Basic
|
$
|
0.03
|
$
|
1.92
|
$
|
1.61
|
$
|
1.75
|
||||||||
Diluted
|
$
|
0.03
|
$
|
1.89
|
$
|
1.58
|
$
|
1.71
|
||||||||
Weighted-average common shares outstanding:
|
||||||||||||||||
Basic
|
2,681
|
2,667
|
2,679
|
2,661
|
||||||||||||
Diluted
|
2,721
|
2,701
|
2,727
|
2,701
|
Three month period ended
|
September 30,
2015
|
September
30, 2014
|
Change
|
||||||||||||||||||
GAAP
Measure:
Total $
|
Non-GAAP
Measure:
Constant $
|
GAAP
Measure:
Total $
|
Dollar
|
Percent
|
|||||||||||||||||
Net Sales
|
$
|
43.9
|
$
|
48.2
|
$
|
55.6
|
$
|
(7.4
|
)
|
(13.3
|
)
|
% | |||||||||
Product
|
35.3
|
38.7
|
45.9
|
(7.2
|
)
|
(15.7
|
)
|
% | |||||||||||||
Pack
|
7.1
|
8.0
|
7.8
|
0.2
|
2.6
|
% | |||||||||||||||
Other
|
1.5
|
1.5
|
1.9
|
(0.4
|
)
|
(21.1
|
)
|
% | |||||||||||||
Gross Profit
|
35.6
|
39.1
|
45.3
|
(6.2
|
)
|
(13.7
|
)
|
% | |||||||||||||
Income from Operations
|
2.2
|
2.8
|
8.2
|
(5.4
|
)
|
(65.9
|
)
|
% |
Nine month period ended
|
September 30,
2015
|
September
30, 2014
|
Change
|
||||||||||||||||||
GAAP
Measure:
Total $
|
Non-GAAP
Measure:
Constant $
|
GAAP
Measure:
Total $
|
Dollar
|
Percent
|
|||||||||||||||||
Net Sales
|
$
|
135.0
|
$
|
144.2
|
$
|
144.9
|
$
|
(0.7
|
)
|
(0.5
|
)
|
% | |||||||||
Product
|
105.8
|
112.9
|
117.7
|
(4.8
|
)
|
(4.1
|
)
|
% | |||||||||||||
Pack
|
24.9
|
26.9
|
21.7
|
5.2
|
24.0
|
% | |||||||||||||||
Other
|
4.3
|
4.4
|
5.5
|
(1.1
|
)
|
(20.0
|
)
|
% | |||||||||||||
Gross Profit
|
109.9
|
117.2
|
115.5
|
1.7
|
1.5
|
% | |||||||||||||||
Income from Operations
|
9.4
|
10.5
|
10.2
|
0.3
|
2.9
|
% |
2015
|
2014
|
|||||||||||||||
New
|
97,000
|
43.9
|
%
|
113,000
|
48.3
|
%
|
||||||||||
Continuing
|
124,000
|
56.1
|
%
|
121,000
|
51.7
|
%
|
||||||||||
Total
|
221,000
|
100.0
|
%
|
234,000
|
100.0
|
%
|
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
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Feb. 29, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MANNATECH INC | ||
Entity Central Index Key | 0001056358 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 38,898,522 | ||
Entity Common Stock, Shares Outstanding | 2,696,986 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
ASSETS | ||
Accounts receivable, allowance for doubtful accounts | $ 261 | $ 213 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 99,000,000 | 99,000,000 |
Common stock, shares issued (in shares) | 2,773,972 | 2,773,972 |
Common stock, shares outstanding (in shares) | 2,682,078 | 2,676,077 |
Treasury stock, shares (in shares) | 91,894 | 97,895 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Net sales | $ 180,267 | $ 190,081 |
Cost of sales | 34,102 | 38,350 |
Gross profit | 146,165 | 151,731 |
Operating expenses: | ||
Commissions and incentives | 72,956 | 75,240 |
Selling and administrative expenses | 34,458 | 36,193 |
Depreciation and amortization | 1,793 | 1,608 |
Other operating costs | 24,814 | 25,948 |
Total operating expenses | 134,021 | 138,989 |
Income from operations | 12,144 | 12,742 |
Interest income | 210 | 121 |
Other expense, net | (4,155) | (3,042) |
Income before income taxes | 8,199 | 9,821 |
Income tax provision | (2,360) | (3,325) |
Net income | $ 5,839 | $ 6,496 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 2.18 | $ 2.44 |
Diluted (in dollars per share) | $ 2.14 | $ 2.40 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 2,680 | 2,663 |
Diluted (in shares) | 2,728 | 2,706 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net income | $ 5,839 | $ 6,496 |
Foreign currency translations gain | 815 | 653 |
Pension obligations, net of tax provision of $11 and $11 in 2015 and 2014, respectively | (20) | (19) |
Comprehensive income | $ 6,634 | $ 7,130 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Pension obligations, tax | $ 11 | $ 11 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid in Capital [Member] |
Retained Earnings (Deficit) [Member] |
Accumulated Other Comprehensive Loss [Member] |
Treasury Stock [Member] |
Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2013 | $ 0 | $ 42,592 | $ (3,746) | $ (743) | $ (14,651) | $ 23,452 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Charge related to stock-based compensation | 0 | 678 | 0 | 0 | 0 | 678 |
Stock option exercises | 0 | (2,630) | 0 | 0 | 2,714 | 84 |
Tax effect from exercise of stock options - benefit | 0 | 32 | 0 | 0 | 0 | 32 |
Foreign currency translation | 0 | 0 | 0 | 653 | 0 | 653 |
Pension obligations, net of tax | 0 | 0 | 0 | (19) | 0 | (19) |
Net income | 0 | 0 | 6,496 | 0 | 0 | 6,496 |
Balance at Dec. 31, 2014 | 0 | 40,672 | 2,750 | (109) | (11,937) | 31,376 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Charge related to stock-based compensation | 0 | 592 | 0 | 0 | 0 | 592 |
Stock option exercises | 0 | (704) | 0 | 0 | 732 | 28 |
Tax effect from exercise of stock options - expense | 0 | (66) | 0 | 0 | 0 | (66) |
Foreign currency translation | 0 | 0 | 0 | 815 | 0 | 815 |
Pension obligations, net of tax | 0 | 0 | 0 | (20) | 0 | (20) |
Net income | 0 | 0 | 5,839 | 0 | 0 | 5,839 |
Balance at Dec. 31, 2015 | $ 0 | $ 40,494 | $ 8,589 | $ 686 | $ (11,205) | $ 38,564 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands |
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | ||
Pension obligations, tax | $ 11 | $ 11 |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mannatech, Incorporated (together with its subsidiaries, the “Company”), located in Coppell, Texas, was incorporated in the state of Texas on November 4, 1993 and is listed on the NASDAQ Global Select Market under the symbol “MTEX”. The Company develops, markets, and sells high-quality, proprietary nutritional supplements, topical and skin care and anti-aging products, and weight-management products. We currently sell our products into three regions: (i) North America/South America (the United States, Canada, Colombia and Mexico); (ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom); and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan and Hong Kong). Independent associates (“associates”) purchase the Company’s products at published wholesale prices to either sell to retail customers or for personal use. Members purchase the Company’s products at a discount from published retail prices primarily for personal use. The Company cannot distinguish products sold for personal use from other sales because it is not involved with the products after delivery, other than usual and customary product warranties and returns. Only independent associates are eligible to earn commissions and incentives. Principles of Consolidation The consolidated financial statements and footnotes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles requires the use of estimates that affect the reported value of assets, liabilities, revenues and expenses. These estimates are based on historical experience and various other factors. The Company continually evaluates the information used to make these estimates as the business and economic environment changes. Historically, actual results have not varied materially from the Company’s estimates and the Company does not currently anticipate a significant change in its assumptions related to these estimates. However, actual results may differ from these estimates under different assumptions or conditions. The use of estimates is pervasive throughout the consolidated financial statements, but the accounting policies and estimates considered the most significant are described in this note to the consolidated financial statements, Organization and Summary of Significant Accounting Policies. Foreign Currency Translation The United States dollar is the functional currency for the majority of the Company’s foreign subsidiaries. As a result, nonmonetary assets and liabilities are translated at their approximate historical rates, monetary assets and liabilities are translated at exchange rates in effect at the end of the year, and revenues and expenses are translated at weighted-average exchange rates for the year. The local currency is the functional currency of our subsidiaries in Japan, Republic of Korea, Taiwan, Norway, Sweden, and Mexico. These subsidiaries’ assets and liabilities are translated into the United States dollars at exchange rates existing at the balance sheet dates, revenues and expenses are translated at weighted-average exchange rates, and shareholders’ equity and intercompany balances are translated at historical exchange rates. The foreign currency translation adjustment is recorded as a separate component of shareholders’ equity and is included in accumulated other comprehensive loss. Transaction losses totaled approximately $4.2 million and $3.0 million, for the years ended December 31, 2015 and 2014, respectively, and are included in other expense, net in the Company’s Consolidated Statements of Operations. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company includes in its cash and cash equivalents credit card receivables due from its credit card processor, as the cash proceeds from credit card receivables are received within 24 to 72 hours. As of December 31, 2015 and 2014, credit card receivables were $0.4 million and $1.2 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $31.3 million and $24.8 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest bearing deposits. The Company also holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk. Restricted Cash The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) Australia building lease collateral. As of December 31, 2015 and 2014, our total restricted cash was $8.1 million and $8.6 million, respectively. Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. Receivables are created upon shipment of an order if the credit card payment is rejected or does not match the order total. As of December 31, 2015 and 2014, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. At December 31, 2015 and 2014, the Company held an allowance for doubtful accounts of $0.3 million and $0.2 million, respectively. Inventories Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or market. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization computed using the straight-line method over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Expenditures for maintenance and repairs are charged to expense as incurred. The cost of property and equipment sold or otherwise retired and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in other operating costs in the accompanying Consolidated Statements of Operations. The estimated useful lives of fixed assets are as follows:
(1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes a comparison of future projected cash flows generated by the asset or group of assets with its associated net carrying value. If the net carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value. We determined that no impairment indicators existed during the years ended December 31, 2015 and 2014. Other Assets At December 31, 2015 and 2014, other assets were $3.8 million and $3.6 million, respectively. Included in the December 31, 2015 and 2014 balances were deposits for building leases in various locations of $1.9 million and $1.5 million, respectively. Also included in the December 31, 2015 and 2014 balances were $1.6 million and $1.7 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages. Other assets at each of December 31, 2015 and 2014 also include $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. Notes Payable Notes payable were $1.8 million at December 31, 2015 as a result of funding from a capital financing agreement related to our investment in computer hardware and software and other financing arrangements. At December 31, 2015, the current portion was $0.7 million and the long-term portion was $1.1 million. Other Long-Term Liabilities Other long-term liabilities were $2.0 million and $2.1 million for the years ending December 31, 2015 and 2014. At December 31, 2015 and 2014, we recorded $0.7 million and $0.8 million, respectively, in other long-term liabilities related to uncertain income tax positions (see Note 8, Income Taxes). Certain operating leases for the Company’s regional office facilities contain a restoration clause that requires the Company to restore the premises to its original condition. At each of December 31, 2015 and 2014, accrued restoration costs related to these leases amounted to $0.4 million. At December 31, 2015 and 2014, the Company also recorded a long-term liability for an estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations of $0.5 million and $0.6 million, respectively (See Note 10, Employee Benefit Plans). Revenue Recognition and Deferred Commissions The Company’s revenue is derived from sales of individual products, sales of its starter and renewal packs, and shipping fees. Substantially all of the Company’s product and pack sales are made to associates at published wholesale prices and to members at discounted published retail prices. The Company records revenue net of any sales taxes and records a reserve for expected sales returns based on its historical experience. The Company recognizes revenue from shipped packs and products upon receipt by the customer. Corporate-sponsored event revenue is recognized when the event is held. The Company defers certain components of its revenue. At December 31, 2015 and December 31, 2014, the Company’s deferred revenue was $8.7 million and $10.9 million, respectively. During the third quarter of 2013, the Company started a loyalty program through which customers earn loyalty points from qualified automatic orders, which can be applied to future purchases. The Company defers the dollar equivalent in revenue of these points until the points are applied or forfeited, which includes an estimate of the percentage of the unvested loyalty points that are expected to be forfeited. During the third quarter 2014, the Company modified the program to allow loyalty points to vest more quickly. The deferred revenue associated with the loyalty program at December 31, 2015 and December 31, 2014 was $8.1 million and $9.7 million, respectively. Deferred revenue consisted primarily of: (i) sales of packs and products shipped but not received by the customers by the end of the respective period; (ii) revenue from the loyalty program; and (iii) prepaid registration fees from customers planning to attend a future corporate-sponsored event. In total current assets, the Company defers commissions on (i) the sales of packs and products shipped but not received by the customers by the end of the respective period and (ii) the loyalty program. Deferred commissions were $3.4 million and $4.5 million at December 31, 2015 and December 31, 2014, respectively.
We estimate a sales return reserve for expected sales refunds based on our historical experience over a rolling six-month period. If actual results differ from our estimated sales return reserve due to various factors, the amount of revenue recorded for each period could be materially affected. Historically, our sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale. Sales returns have historically averaged 1.5% or less of our gross sales. For the year ended December 31, 2015 our sales return reserve consisted of the following (in thousands):
Shipping and Handling Costs The Company records freight and shipping fees collected from its customers as revenue. The Company records inbound freight as a component of inventory and cost of sales. Commission and Incentive Expenses Associates earn commissions and incentives based on their direct and indirect commissionable net sales over 13 business periods. Each business period equals 28 days. The Company accrues commissions and incentives when earned by associates and pays commissions on product sales three weeks following the business period end and pays commissions on its pack sales five weeks following the business period end. Advertising Expenses The Company expenses advertising and promotions in selling and administrative expenses when incurred. Advertising and promotional expenses were approximately $5.5 million and $4.9 million, for the years ended December 31, 2015 and 2014, respectively. Educational and promotional items, called sales aids, are sold to associates to assist in their sales efforts and are included in inventories and charged to cost of sales when sold. Research and Development Expenses The Company expenses research and development expenses as incurred. Research and development expenses related to new product development, enhancement of existing products, clinical studies and trials, Food and Drug Administration compliance studies, general supplies, internal salaries, third-party contractors, and consulting fees were approximately $1.7 million and $1.6 million, respectively, for the years ended December 31, 2015 and 2014. Salaries and contract labor are included in selling and administrative expenses and all other research and development costs are included in other operating costs. Stock-Based Compensation The Company currently has one active stock-based compensation plan, which was approved by its shareholders at its 2008 Annual Shareholder’s meeting and amended at the 2010, 2012, and 2014 Annual Shareholder meetings. The Company grants stock options to its employees, consultants, and board members with an exercise price equal to the closing price of its common stock on the date of grant with a term no greater than 10 years. The majority of stock options vest over two or three years. Incentive stock options granted to shareholders who own 10% or more of the Company’s outstanding stock are granted at an exercise price that may not be less than 110% of the closing price of the Company’s common stock on the date of grant and have a term no greater than five years. At the date of grant, the Company determines the fair value of the stock option award and recognizes compensation expense over the requisite service period, or the vesting period of the award. The fair value of the stock option award is calculated using the Black-Scholes option-pricing model. The Company records stock-based compensation expense in selling and administrative expenses. Software Development Costs The Company capitalizes qualifying internal payroll and external contracting and consulting costs related to the development of internal use software that are incurred during the application development stage, which includes design of the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project along with post-implementation stages of internal use software are expensed as incurred. The Company amortizes such costs over the estimated useful life of the software, which is three to five years once the software is placed in service. Other Operating Costs Other operating costs include travel, accounting/legal/consulting fees, credit card processing fees, banking fees, off-site storage fees, utilities, and other miscellaneous operating expenses. Income Taxes The Company determines the provision for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. The Company evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance for the portion of any deferred tax assets where the likelihood of realizing an income tax benefit in the future does not meet the more likely than not criterion for recognition. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. Comprehensive Income and Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Norway, Sweden and Mexico operations, and changes in the pension obligation for its Japanese employees. Concentration Risk A significant portion of our revenue is derived from five products: NutriVerus™, PLUS™, Ūth™ Skin Rejuvenation, and our core Ambrotose® complex products, which include the Ambrotose® products and Advanced Ambrotose® products. A decline in sales value of such products could have a material adverse effect on our earnings, cash flows, and financial position. Revenue from these products were as follows for the years ended December 31, 2015 and 2014 (in thousands, except percentages):
Our business is not currently exposed to customer concentration risk given that no independent associate has ever accounted for more than 10% of our consolidated net sales. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, investments, receivables, and restricted cash. The Company utilizes financial institutions that the Company considers to be of high credit quality and periodically evaluates the credit rating of such institutions and the allocation of their investments to minimize exposure to credit concentration risk. Fair Value of Financial Instruments The fair value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, time deposits, money market investments, receivables, payables, and accrued expenses, approximate their carrying values due to their relatively short maturities. See Note 3 to our Consolidated Financial Statements, Fair Value, for more information. |
RECENT ACCOUNTING PRONOUNCEMENTS |
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RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. In August, 2015 the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date which amended ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) to defer the effective date of ASU No. 2014-09 for all entities by one year. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of goods to customers in an amount that reflects the consideration to which the entity expects in exchange for those goods. To achieve that core principle, an entity should apply the following steps: -Step 1: Identify the contract(s) with a customer. -Step 2: Identify the performance obligations in the contract. -Step 3: Determine the transaction price. -Step 4: Allocate the transaction price to the performance obligations in the contract. -Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The standard is effective for the Company for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early application is permitted for annual reporting periods beginning after December 15, 2016. Management is currently evaluating the impact of the Company’s pending adoption of ASU 2014-09 on the Company’s consolidated financial statements and has not yet determined the method by which the Company will adopt the standard in 2018. In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items, which eliminates from GAAP the concept of extraordinary items. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Because this standard only impacts presentation and disclosure requirements, its adoption is not expected to have a material impact on the Company’s consolidated results of operations or financial condition. In April 2015, the FASB issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), which adds guidance to Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and early adoption is permitted. Management is currently evaluating the impact of this standard on the Company’s consolidated results of operations and financial condition. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which provides guidance to more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). For Mannatech, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Management is currently evaluating the impact of this standard on the Company’s consolidated results of operations and financial condition. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which changes how deferred taxes are classified on organizations’ balance sheets. The update eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Management is currently evaluating the impact of this standard on the Company’s consolidated results of operations and financial condition. In February of 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. Management is currently evaluating the future impact of ASU 2016-02 on its consolidated financial position, results of operations and cash flows. Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
FAIR VALUE |
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FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | NOTE 3: FAIR VALUE The Company utilizes fair value measurements to record fair value adjustments to certain financial assets and to determine fair value disclosures. Fair Value Measurements (Topic 820) of the FASB establishes a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories: · Level 1—Quoted unadjusted prices for identical instruments in active markets. · Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. · Level 3—Model derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. The primary objective of the Company’s investment activities is to preserve principal while maximizing yields without significantly increasing risk. The investment instruments held by the Company are money market funds and interest bearing deposits for which quoted market prices are readily available. The Company considers these highly liquid investments to be cash equivalents. These investments are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The tables below present the recorded amount of financial assets measured at fair value (in thousands) on a recurring basis as of December 31, 2015 and 2014. The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at December 31, 2015 and 2014.
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INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | NOTE 4: INVENTORIES Inventories consist of raw materials, finished goods, and promotional materials. The Company provides an allowance for any slow-moving or obsolete inventories. Inventories as of December 31, 2015 and 2014, consisted of the following (in thousands):
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PROPERTY AND EQUIPMENT | NOTE 5: PROPERTY AND EQUIPMENT As of December 31, 2015 and 2014, property and equipment consisted of the following (in thousands):
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CAPITAL LEASE OBLIGATIONS |
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CAPITAL LEASE OBLIGATIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL LEASE OBLIGATIONS | NOTE 6: CAPITAL LEASE OBLIGATIONS As of December 31, 2015 and 2014, the net book value of leased assets was $1.1 million and $1.3 million, respectively for leased equipment, purchased licenses, and corporate insurance. The future minimum lease payments (in thousands) are as follows:
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ACCRUED EXPENSES |
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ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES | NOTE 7: ACCRUED EXPENSES As of December 31, 2015 and 2014, accrued expenses consisted of the following (in thousands):
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INCOME TAXES |
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INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | NOTE 8: INCOME TAXES The components of the Company’s income before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands):
The components of the Company’s income tax provision for the years ended December 31 are as follows (in thousands):
A reconciliation of the Company’s effective income tax rate and the United States federal statutory income tax rate is summarized as follows, for the years ended December 31:
For the years ended December 31, 2015 and 2014, the Company’s effective tax rate was 28.9% and 33.9% respectively. For 2015, the effective tax rate was less than what would have been expected if the federal statutory rate was applied to income before taxes. Items decreasing the effective income tax rate included the lower statutory tax rates in foreign jurisdictions compared to the U.S. and a larger mix of foreign income over U.S. income than in prior years. In addition, the rate decreased for an overall reduction in the valuation allowances associated with certain deferred tax assets. For 2014, the effective tax rate was close to what would have been expected if the federal statutory rate was applied to income before taxes. Items increasing the effective income tax rate included the change in the valuation allowances associated with certain deferred tax assets, U.S. federal tax on deemed foreign dividend distribution, and “subpart F income” resulting from controlled foreign corporation operations. Items decreasing the effective income tax rate included the foreign tax credits. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consisted of the following at December 31 (in thousands):
(1) The Company’s net operating loss will expire as follows (dollar amounts in thousands):
(1) On March 21, 2014, the Company suspended operations in the Ukraine. In addition to net operating loss attributes, the Company has recorded a foreign tax credit carryforward of $3.1 million, which will begin to expire in 2019 and a charitable contribution carryforward of $0.5 million which will expire between years 2016 through 2020. The Company maintains a full valuation against both the foreign tax credits and the charitable contribution carryforward. At December 31, 2015 and 2014, the Company’s valuation allowance was $9.0 million and $9.7 million, respectively. The provisions of ASC Topic 740 require a company to record a valuation allowance when the “more likely than not” criterion for realizing a deferred tax asset cannot be met. A company is to use judgment in reviewing both positive and negative evidence of realizing a deferred tax asset. Furthermore, the weight given to the potential effect of such evidence is commensurate with the extent the evidence can be objectively verified. The valuation allowances presented below (in millions) at December 31, 2015 and 2014, represented a reserve against the Company’s net deferred tax asset the Company believed the “more likely than not” criterion for recognition purposes could not be met. The U.S. valuation allowance decreased due to the usage of foreign tax credits.
(1) On March 21, 2014, the Company suspended operations in the Ukraine. At December 31, 2015 and 2014, the Company did not record a provision for any United States or foreign withholding taxes on its undistributed earnings related to its foreign subsidiaries because it is the intention of the Company to reinvest its undistributed earnings indefinitely in its foreign operations. Generally, such earnings become subject to United States income tax upon the remittance of dividends and under certain other circumstances. At December 31, 2015, it is not practicable to estimate the amount of deferred tax liability on such undistributed earnings. Deferred tax assets (liabilities) are classified in the accompanying Consolidated Balance Sheets of December 31 as follows (in thousands):
On January 1, 2007, the Company adopted FIN 48, which was codified into Topic 740, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements, uncertain tax positions that it has taken or expects to take on a tax return. Topic 740 requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of December 31, 2015, the Company recorded $0.1 million in current liabilities and $0.7 million in other long-term liabilities related to uncertain income tax positions and income tax reserves associated with various audits. At December 31, 2015, the Company had gross tax-affected unrecognized tax benefits of $0.6 million that, if recognized, would impact the effective tax rate. The Company recognizes penalties and interest charges related to unrecognized tax benefits in current tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows, for the years ended December 31, 2015 and 2014 (in thousands):
The Company recognizes interest and/or penalties related to uncertain tax positions in current income tax expense. As of December 31, 2015 and December 31, 2014, the Company had accrued interest and penalties of $0.2 million and $0.1 million in the consolidated balance sheet, of which $26 thousand and $56 thousand were accrued in the consolidated statement of operations. Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase or decrease within the next twelve months due to uncertainties regarding the timing of any examinations, the Company expects its unrecognized tax benefits to decrease by $0.1 million due to the lapse of statutes of limitations during the next twelve months. The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2015, the tax years that remained subject to examination by a major tax jurisdiction for the Company’s most significant subsidiaries were as follows:
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TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES |
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TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES [Abstract] | ||||||||||||||||||||||||||||||||||||||||
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES | NOTE 9: TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES For the year ended December 31, 2015, the Company made cash donations of $0.9 million, $0.5 million of which was accrued at December 31, 2014, to the M5M Foundation, a 501(c)(3) charitable organization that works to combat the epidemic of childhood malnutrition on a global scale. Several of the Company’s directors and officers and their family members serve on the board of the M5M Foundation, including:
During 2015, we paid employment compensation of approximately $251,000 in salary, bonus, auto allowance, and other compensation to Landen Fredrick, son of J. Stanley Fredrick, the Company’s Chairman of the Board and a major shareholder. In addition, Landen Fredrick participated in the employee health care benefit plans available to all employees of the Company. Landen Fredrick has served as Senior Vice President, Supply Chain and IT since August of 2015. Prior to that, Mr. Fredrick served as Vice President, Global Operations since May of 2013, Vice President, North American Sales and Operations since January of 2011, as Vice President, North American Sales since February of 2010 and as Senior Director of Tools and Training since his hire in May of 2006. Landen Fredrick also serves on the Board of the M5M Foundation. Mr. Ray Robbins is a member of the Company’s Board of Directors and a major shareholder. Mr. Robbins holds positions in the Company’s associate global downline network marketing system. In addition, several of Mr. Robbins’ family members are independent associates. The Company pays commissions and incentives to its independent associates and during 2015 and 2014, the Company paid aggregate commissions and incentives to Mr. Robbins and his family of approximately $3.2 million and $2.9 million, respectively. The aggregate amount of commission and incentives paid to Mr. Robbins was approximately $2.9 million and $2.6 million in 2015 and 2014, respectively. The aggregate amount of commission and incentives paid to family members was approximately $0.3 million in each of 2015 and 2014, of which $0.2 million was paid each year to his son, Kevin Robbins, and $0.1 million was paid each year to his daughter, Marla Finley, and daughter-in-law, Demra Robbins, who both share an account. All commissions and incentives paid to Mr. Robbins and his family members are in accordance with the Company’s global associate career and compensation plan. The Company has also contracted with a software development firm owned by Ryan Robbins, the son of Mr. Ray Robbins. The value of services performed during 2015 were less than $0.1 million. Johanna Bala, the wife of Al Bala, the Company’s Chief Executive Officer and President, is an independent associate who earns commissions and incentives. The aggregate amount of commission and incentives paid to Johanna Bala was approximately $0.2 million in each of 2015 and 2014. Mr. Samuel Caster is the Company’s founder and former Chairman of the Board. Prior to January 2014, Mr. Caster’s beneficial ownership of the Company was approximately 18%, but in January 2014 fell below 5%. Mr. Caster founded MannaRelief in 1999 and served as its Chairman from 1999 through August 2007. MannaRelief employs William A. Mullens, Mr. Caster’s brother-in-law, as its Executive Director. Mr. Caster’s wife, Linda Caster, serves as MannaRelief’s Chairman of the Board. MannaRelief is a 501(c)(3) charitable organization that provides charitable services for children. MannaRelief is not owned or operated by the Company. The Company discontinued supporting MannaRelief in the second quarter of 2014. Historically, the Company made cash donations to MannaRelief, sold products to MannaRelief at cost plus shipping and handling charges, and shipped products purchased by MannaRelief to its chosen recipients. The Company made cash donations and sold products to MannaRelief as follows:
Beginning on December 1, 2011, the Company entered into a series of successive Consulting Agreements with WonderEnterprises, LLC (f/k/a Salinda Enterprises, LLC; hereinafter “Wonder”), where the Company paid Wonder for consulting services performed by Mr. Caster plus reimbursable expenses. Mr. Caster is the owner and an employee of Wonder. For the year ended December 31, 2014, Mr. Caster received $0.1 million for consulting services under these Consulting Agreements. Pursuant to the termination of the final Consulting Agreement according to its terms on February 28, 2014, Mr. Caster is no longer serving as a consultant for the Company. |
EMPLOYEE BENEFIT PLANS |
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EMPLOYEE BENEFIT PLANS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | NOTE 10: EMPLOYEE BENEFIT PLANS Employee Retirement Plan Effective May 9, 1997, the Company adopted a Defined Contribution 401(k) and Profit Sharing Plan (the “401(k) Plan”) for its United States and Canada employees. The 401(k) Plan covers all regular full-time and part-time employees who have completed three months of service and attained the age of twenty-one. United States employees can contribute up to 100 percent of their annual compensation but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) plan permits matching and discretionary employer contributions. The Company’s matching contributions for its United States and Canada employees vest ratably over a five-year period. During each of the years ended December 31, 2015 and 2014, the Company contributed approximately $0.2 million to the 401(k) Plan for matching contributions. The Company also sponsors a non-U.S. defined benefit plan covering its employees in its Japan subsidiary (the “Benefit Plan”). Benefits under the Benefit Plan are based on a point system for position grade and years of service. The Company utilizes actuarial methods. Inherent in the application of these actuarial methods are key assumptions, including, but not limited to, discount rates and expected long-term rates of return on plan assets. Changes in the related Benefit Plan costs may occur in the future due to changes in the underlying assumptions, changes in the number and composition of plan participants, and changes in the level of benefits provided. The Company uses a measurement date of December 31 to evaluate and record any post-retirement benefits related to the Benefit Plan. Projected Benefit Obligation and Fair Value of Plan Assets The Benefit Plan’s projected benefit obligation and valuation of plan assets were as follows for the years ended December 31 (in thousands):
The weighted-average assumptions to determine the benefit obligation and net cost are as follows:
Components of Expense Pension expense for the Benefit Plan is included in selling, general and administrative expenses in the Consolidated Statements of Operations and is comprised of the following for the years ended December 31 (in thousands):
Estimated Benefits and Contributions The Company expects to contribute approximately $53,000 to the Benefit Plan in 2016. As of December 31, 2015, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands):
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STOCK OPTION PLAN |
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STOCK OPTION PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTION PLAN | NOTE 11: STOCK OPTION PLAN Summary of Stock Plan The Company currently has one active stock-based compensation plan, which was approved by shareholders. The Company grants stock options to employees, consultants, and board members at the fair value of its common stock on the date of grant, with a term no greater than ten years. The majority of stock options vest over two or three years. Shareholders who own 10% or more of the Company’s outstanding stock are granted incentive stock options at an exercise price that may not be less than 110% of the fair market value of the Company’s common stock on the date of grant and have a term no greater than five years. In February 2008, the Company’s Board of Directors approved the Mannatech, Incorporated 2008 Stock Incentive Plan (as amended, the “2008 Plan”), which reserved up to 100,000 (as adjusted for a 1-for-10 reverse stock split) shares of common stock for issuance of stock options and restricted stock to our employees, board members, and consultants, plus any shares reserved under the Company’s then-existing, unexpired stock plans for which options had not yet been issued, and any shares underlying outstanding options under the then-existing stock option plans that terminate without having been exercised in full. The 2008 Plan was approved by the Company’s shareholders at the 2008 Annual Shareholders’ Meeting and was amended at the 2012 Annual Shareholders’ Meeting to increase the number of shares of common stock subject to the plan by 100,000 and amended again at the 2014 Annual Shareholder Meeting to increase the number of shares of common stock subject to the plan by an additional 130,000. As of December 31, 2015, the 2008 Plan had 127,124 stock options available for grant before the plan expires on February 20, 2018. A summary of changes in stock options outstanding during the year ended December 31, 2015, is as follows:
During 2015, the Company issued 5,001 new shares upon the exercise of options, and the Company granted 1,000 new shares to a member of the Board. Options exercised during the year ending December 31, 2015 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price of less than $0.1 million. Options exercised during the year ending December 31, 2014 had a total intrinsic value of less than $0.2 million. Non-vested shares at December 31, 2015 and 2014 were 77,000 and 121,000, respectively. Valuation and Expense Information Under FASB ASC Topic 718 Compensation – Stock Compensation Under the provisions of FASB ASC Topic 718, the Company is required to measure and recognize compensation expense related to any outstanding and unvested stock options previously granted, and thereafter recognize, in its consolidated financial statements, compensation expense related to any new stock options granted after implementation using a calculated fair-value based option-pricing model. The Company uses the Black-Scholes option-pricing model to calculate the fair value of all of its stock options and its assumptions are based on historical information. The following assumptions were used to calculate the compensation expense and the calculated fair value of stock options granted each year:
(1) The Company declared no dividends in 2015 or 2014. The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatilities of the Company’s stock. The expected life assumptions are based on the Company’s historical employee exercise and forfeiture behavior. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2015 and 2014 was $11.90 and $11.25 per share, respectively. The total fair value of shares vested during the years ended December 31, 2015 and 2014 was $0.6 million and $0.1 million, respectively. The Company recorded the following amounts related to the expense of the fair values of options during the years ended December 31, 2015 and 2014 (in thousands):
As of December 31, 2015, the Company had approximately $0.6 million of total unrecognized compensation expense related to stock options currently outstanding, to be recognized in future years, ending December 31, as follows (in thousands):
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COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 12: COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases certain office space, automobiles, computer hardware, and warehouse equipment under various non-cancelable operating leases. Some of these leases have renewal options. All of the Company’s leases expire at various times through August 2023. The Company also leases equipment under various month-to-month cancelable operating leases. For the years ended December 31, 2015 and 2014, total rent expense was approximately $3.6 million and $3.9 million, respectively. Approximate future minimum rental commitments for non-cancelable operating leases (in thousands) are as follows:
Purchase Commitments The Company maintains supply agreements with its suppliers and manufacturers. Some of the supply agreements contain exclusivity clauses and/or minimum annual purchase requirements. In March 2006, the Company entered into a ten-year supply agreement to purchase plant-derived mineral nutrition products from IHT Health Products, Inc. (f.k.a. InB:Biotechnologies, Inc.). As of December 31, 2015, the Company is required to purchase an aggregate of $5.0 million through 2016. Royalty and Consulting Agreements The Company utilizes royalty agreements with individuals and entities to provide compensation for items relating to developed products, websites and email provided to our associates. The Company paid royalties of $0.2 million and $0.3 million in 2015 and 2014, respectively. Employment Agreements The Company has non-cancellable employment agreements with certain executives. If the employment relationships with these executives were terminated, as of December 31, 2015, the Company would continue to be indebted to the executives for $1.5 million, payable through 2016. |
LITIGATION |
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LITIGATION [Abstract] | |
LITIGATION | NOTE 13: LITIGATION Pending Litigation Diana Anselmo and New Day Today Corporation v. Mannatech, Incorporated, Case No. DC-15-01904, Judicial District Court, Dallas County, Texas On February 18, 2015 Ms. Diana Anselmo and New Day Today Corporation (collectively, the “Plaintiffs”) filed suit against Mannatech alleging breach of contract pertaining to a portion of proceeds from a Mannatech Associate position once held by Ms. Anselmo’s former husband, Ray Gebauer. Plaintiffs are seeking damages in excess of $1,000,000 plus legal fees and expenses and a declaration that the Company continue to pay Plaintiffs proceeds from Mr. Gebauer’s former account. The Company retained counsel and Company filed its answer on March 23, 2015 denying Plaintiff’s allegations. The trial was scheduled for March 7, 2016; however, on December 7, 2015 the Court granted the parties Agreed Motion for Continuation and reset the trial for July 11, 2016. The Court issued a mediation order on April 20, 2015. Mediation must be conducted no later than June 17, 2016. The parties remain engaged in the discovery process. It is not possible at this time to predict whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter. However, the Company believes it has a valid defense and will vigorously defend this claim. This matter remains open. Mannatech Korea, Ltd. v. Busan Custom Office, Busan District Court, Korea On or before April 12, 2015, Mannatech Korea, Ltd. filed a suit against the Busan Custom Office (“BCO”) to challenge BCO’s method of calculation regarding its assessment notice issued on July 11, 2013. The assessment notice included an audit of the Company’s imported goods covering fiscal years 2008 through 2012 and required the Company to pay $1.0 million for this assessment, all of which has been accrued to date. The Court ordered both parties to submit a response to its inquiry by January 15, 2016, and upon the response by both parties, the Court will determine whether to issue a decision without additional hearing or conduct additional hearing. This matter remains open. Patent Litigation Mannatech, Incorporated v. Wellness Quest, LLC and Harley Reginald McDaniel, Case No. 3:14-cv-2497, U.S. District Court, for the Northern District of Texas, Dallas Division On July 11, 2014 the Company filed a patent infringement lawsuit against Wellness Quest, LLC and Dr. H. Reginald McDaniel (“Defendants”) alleging the Defendants infringe United States Patent Nos. 7,157,431 and 7,202,220, both entitled “Compositions of Plant Carbohydrates as Dietary Supplements,” (the “Patents”) and seeking to stop their manufacture, offer, and sale of infringing glyconutritional dietary supplement products. On July 16, 2014, the Company filed a Motion for Preliminary Injunction preventing Defendants from infringing the Patents pending a final decision on the merits. On August 29, 2014, the Defendants filed their Response to Plaintiff’s Motion for Preliminary Injunction and Brief in Support along with their Answer and Affirmative Defenses. On November 4, 2014, the Court denied the Company’s Motion for Preliminary Injunction and Motion to Expedite Discovery. On December 15, 2014, the Company deposed Dr. Reginald McDaniel. Each party submitted its list of claim constructions/definitions and a list of the supporting authority. Each party filed its opening brief and their respective responsive briefs. Defendants have designated an expert and the Company deposed the expert on January 27, 2015 regarding his claim construction opinions while reserving the right to examine him later regarding other matters. The parties remain engaged in the claim construction process. Mediation on this matter was held on April 24, 2015 and a settlement was not reached. On May 12, 2015 the Company received notice of an Order of Transfer advising that the case had been reassigned from Judge Ed Kinkeade to Judge David C. Godbey for all further proceedings. On July 20, 2015, the Court issued its Markman ruling adopting the Company’s proposed claim construction for all disputed terms except for “dietary supplement composition” which it found needed no construction. On August 20, 2015, Defendants filed a request for an interlocutory appeal, and the Company filed a reply on October 6, 2015. The Company also filed a separate motion requesting entry of a final judgment and permanent injunction on September 8, 2015. On November 5, 2015 the Court issued an Order accepting Defendant’s stipulation of infringement under the Court’s claim interpretation and granted the Company’s partial motion for summary judgment and issued a permanent injunction against Defendants’ infringement of the Patents. The Court stayed the permanent injunction until the conclusion of Defendants’ appeal to the U.S. Court of Appeals for the Federal Circuit (the “Court of Appeals”). On December 3, 2015, Defendants filed their Notice of Appeal which was docketed by the Court of Appeals on December 8, 2015. This matter remains open. Mannatech, Incorporated v. RBC Life Sciences, Inc. and RBC Life Sciences USA, Inc,. Case No. 3:15-cv-01321-N, U.S. District Court, for the Northern District of Texas, Dallas Division On April 28, 2015 the Company filed a patent infringement lawsuit against RBC Life Sciences, Inc. and RBC Life Sciences USA, Inc. (“Defendants”) alleging the Defendants infringe upon the Patents and seeking to stop their manufacture, offer, and sale of infringing glyconutritional dietary supplement products. The Defendants asserted counterclaims alleging, among other things, invalidity and non-infringement. On May 12, 2015 the Company received notice of an Order of Transfer advising that the case had been reassigned from Judge Ed Kinkeade to Judge David C. Godbey for all further proceedings. The parties filed the Case Management Report with the Court on June 24, 2015. The Company filed its answer to Defendants’ counterclaims on June 29, 2015. Defendants also asserted that they plan to seek re-examination of the Patents with United States Patent and Trademark Office (“USPTO”). The parties reached a settlement on July 28, 2015, and the final judgment and permanent injunction was entered on August 5, 2015. This matter is closed. These lawsuits continue the Company’s enforcement of its patent rights, and the Company intends to vigorously prosecute these matters. Based on the previous successful patent infringement lawsuits against Country Life, LLC, Glycobiotics International, Inc., Techmedica Health, Inc., IonX Holdings, Inc., Boston Mountain Laboratories, Inc., Green Life, LLC, and Xiong Lo and the recent success against RBC Life Sciences, Inc. and RBC Life Sciences USA, Inc. described above, the Company believes there is a strong likelihood that it will obtain permanent injunctions against the manufacture and sale of any infringing products for the duration of the Company’s patents. Investigation of Potential Claims In re: Mannatech, Inc., Case No. DC-15-01784, 116-th Judicial District Court, Dallas County, Texas The Company engaged outside counsel to initiate an investigation regarding certain activities conducted by Samuel L. Caster. On February 12, 2015, the Company petitioned the Court pursuant to Texas Rule of Civil Procedure 202 to depose Mr. Caster to investigate potential claims the Company may have against him. A hearing on the petition was held on March 17, 2015. The Court granted the Company the opportunity to depose Mr. Caster. An Agreed Order was filed with the Court on April 1, 2015. The Company deposed Mr. Caster on April 29, 2015. Following the deposition, the Company moved forward with exercising its rights under the consulting agreement between the Company and Mr. Caster’s company, Wonder, and initiated arbitration proceedings, which are described below. Arbitration Proceeding Mannatech v. Samuel L. Caster and Wonder Enterprises, LLC, Demand for Arbitration, Case No. 01-15-0003-6812 On May 29, 2015 the Company initiated arbitration proceedings against Samuel L. Caster and Wonder (“Respondents”) alleging breach of contract by Mr. Caster and his company, Wonder, in a series of consulting agreements entered into by the parties. Mannatech seeks to recover actual damages, costs of court and prejudgment interest together with disgorgement of all benefits received by Caster and Wonder. The Company estimates its damages to be between $500,000.00 and $3,500,000.00. On June 12, 2015 Respondents contacted the Company’s counsel to request mediation. The parties have agreed to mediate this dispute; mediation was held on August 17, 2015, and a settlement was not reached. A preliminary hearing for arbitration was held on September 18, 2015, and a final hearing will commence on April 25, 2016. A Scheduling Order has been entered and depositions and discovery must be completed by March 25, 2016. The parties are currently engaged in the discovery process. This matter remains open. Trademark Opposition – U.S. Patent and Trademark Office United States Trademark Opposition No. 91221493, Shaklee Corporation v. Mannatech, Incorporated re: UTH On April 15, 2015 the Company received notice that Shaklee Corporation (“Shaklee”) filed a Notice of Opposition to the Company’s trademark application for UTH (stylized as Ūth) with the USPTO. On May 19, 2015, the Company filed an answer to the opposition and also filed a counterclaim seeking to cancel Shaklee’s registration of its YOUTH mark. Shaklee filed an extension to oppose the UTH mark on June 18, 2015, and the request to extend time to oppose was granted until July 18, 2015. Shaklee filed a second extension on July 17, 2015, and the request to extend time to oppose was granted until September 16, 2015. Shaklee filed motions to strike the Company’s Affirmative Defenses to the Opposition and Counterclaim to cancel their registrations. The Company filed responses and the Trademark Trial and Appeal Board ruled in Shaklee’s favor. The Company filed an amended Answer to the Opposition and Amended Counterclaim on November 18, 2015. Shaklee then filed an answer to the Company’s Counterclaim on December 30, 2015. On September 15, 2015, Shaklee filed two more Notices of Opposition for the UTH & Design and ŪTH applications. The Company filed Answers and Counterclaims on November 20, 2015. This matter remains ongoing. It is not possible at this time to predict the outcome of this office action or whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter. However, the Company believes it has a valid defense and will vigorously defend this claim. This matter will remain open until it is resolved. Litigation in General The Company has incurred several claims in the normal course of business. The Company believes such claims can be resolved without any material adverse effect on its consolidated financial position, results of operations, or cash flows. The Company maintains certain liability insurance; however, certain costs of defending lawsuits are not covered by or only partially covered by its insurance policies, including claims that are below insurance deductibles. Additionally, insurance carriers could refuse to cover certain claims, in whole or in part. The Company accrues costs to defend itself from litigation as they are incurred or as they become determinable. The outcome of litigation is uncertain, and despite management’s views of the merits of any litigation, or the reasonableness of the Company’s estimates and reserves, the Company’s financial statements could nonetheless be materially affected by an adverse judgment. The Company believes it has adequately reserved for the contingencies arising from current legal matters where an outcome was deemed to be probable, and the loss amount could be reasonably estimated. |
SHAREHOLDERS' EQUITY |
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SHAREHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | NOTE 14: SHAREHOLDERS’ EQUITY Preferred Stock On May 19, 1998, the Company amended its Amended and Restated Articles of Incorporation to reduce the number of authorized shares of common stock from 100.0 million to 99.0 million and the Company authorized 1.0 million shares of preferred stock with a par value of $0.01 per share. No shares of preferred stock have ever been issued or outstanding. Treasury Stock On June 30, 2004, the Company’s Board of Directors authorized the Company to repurchase, in the open market, the lesser of (i) 131,756 shares of its common stock and (ii) $1.3 million of its shares, (the “June 2004 Plan”). On August 28, 2006, a second program permitting the Company to purchase, in the open market, up to $20 million of its outstanding shares was approved by our Board of Directors (the “August 2006 Plan”). On July 14, 2011, the Company’s Board of Directors authorized the Company to reactivate the June 2004 Plan. As of March 10, 2016, the maximum number of shares available for repurchase under the June 2004 Plan was 19,084, and the total number of shares purchased in the open market under the June 2004 Plan was 112,672. No shares have ever been purchased under the August 2006 Plan. The Company does not have any stock repurchase plans or programs other than the June 2004 Plan and the August 2006 Plan. Equity-Baed Compensation During 2015, 5,001 shares were issued for stock option exercises and 1,000 shares were issued when the Board granted those shares to a member of the Board as compensation for their work on the Board. Accumulated Other Comprehensive Loss Accumulated other comprehensive income (loss) displayed in the Consolidated Statements of Shareholders’ Equity represents the results of certain shareholders’ equity changes not reflected in the consolidated statements of operations, such as foreign currency translation and certain pension and postretirement benefit obligations. The after-tax components of accumulated other comprehensive income (loss), are as follows (in thousands):
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EARNINGS PER SHARE |
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EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 15: EARNINGS PER SHARE The Company calculates basic Earnings per Share (EPS) by dividing net income by the weighted-average number of common shares outstanding for the period. The diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards under the 2008 Stock Incentive Plan. In determining potential dilution effect of outstanding stock options during 2015 and 2014, the Company used average common stock close price of $20.17 and $16.66, per share, respectively. Approximately 0.1 million of the Company’s stock options were excluded from the diluted EPS calculation for each of 2015 and 2014 as the effect would have been antidilutive. |
SEGMENT INFORMATION |
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SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | NOTE 16: SEGMENT INFORMATION The Company conducts its business as a single operating segment, consolidating all of its business units into a single reportable entity, as a seller of proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products through its network marketing distribution channels operating in twenty-five countries. Each of the Company’s business units sells similar packs and products and possesses similar economic characteristics, such as selling prices and gross margins. In each country, the Company markets its products and pays commissions and incentives in similar market environments. The Company’s management reviews its financial information by country and focuses its internal reporting and analysis of revenues by packs and product sales. The Company sells its products through its independent associates who occupy positions in our network and distribute products through similar distribution channels in each country. No single independent associate has ever accounted for more than 10% of the Company’s consolidated net sales. The Company operates facilities in thirteen countries and sells product in twenty-five countries around the world. These facilities are located in the United States, Canada, Switzerland, Australia, the United Kingdom, Japan, the Republic of Korea (South Korea), Taiwan, South Africa, Mexico, Hong Kong, Singapore and Colombia. Each facility services different geographic areas. We currently sell our products in three regions: (i) North America/South America (the United States, Canada, Colombia and Mexico); (ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom); (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan and Hong Kong). Consolidated net sales shipped to customers in these regions, along with pack and product information for the years ended December 31, are as follows (in millions, except percentages):
Long-lived assets by region, which include property and equipment and construction in progress for the Company and its subsidiaries, as of December 31, reside in the following regions, as follows (in millions):
Inventory balances by region, which consist of raw materials, and finished goods, including promotional materials, and offset by obsolete inventories, for the Company and its subsidiaries, reside in the following regions as of December 31, as follows (in millions):
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | MANNATECH, INCORPORATED AND SUBSIDIARIES SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (in thousands)
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The consolidated financial statements and footnotes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
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Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles requires the use of estimates that affect the reported value of assets, liabilities, revenues and expenses. These estimates are based on historical experience and various other factors. The Company continually evaluates the information used to make these estimates as the business and economic environment changes. Historically, actual results have not varied materially from the Company’s estimates and the Company does not currently anticipate a significant change in its assumptions related to these estimates. However, actual results may differ from these estimates under different assumptions or conditions. The use of estimates is pervasive throughout the consolidated financial statements, but the accounting policies and estimates considered the most significant are described in this note to the consolidated financial statements, Organization and Summary of Significant Accounting Policies. |
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Foreign Currency Translation | Foreign Currency Translation The United States dollar is the functional currency for the majority of the Company’s foreign subsidiaries. As a result, nonmonetary assets and liabilities are translated at their approximate historical rates, monetary assets and liabilities are translated at exchange rates in effect at the end of the year, and revenues and expenses are translated at weighted-average exchange rates for the year. The local currency is the functional currency of our subsidiaries in Japan, Republic of Korea, Taiwan, Norway, Sweden, and Mexico. These subsidiaries’ assets and liabilities are translated into the United States dollars at exchange rates existing at the balance sheet dates, revenues and expenses are translated at weighted-average exchange rates, and shareholders’ equity and intercompany balances are translated at historical exchange rates. The foreign currency translation adjustment is recorded as a separate component of shareholders’ equity and is included in accumulated other comprehensive loss. Transaction losses totaled approximately $4.2 million and $3.0 million, for the years ended December 31, 2015 and 2014, respectively, and are included in other expense, net in the Company’s Consolidated Statements of Operations. |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company includes in its cash and cash equivalents credit card receivables due from its credit card processor, as the cash proceeds from credit card receivables are received within 24 to 72 hours. As of December 31, 2015 and 2014, credit card receivables were $0.4 million and $1.2 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $31.3 million and $24.8 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest bearing deposits. The Company also holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk. |
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Restricted Cash | Restricted Cash The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) Australia building lease collateral. As of December 31, 2015 and 2014, our total restricted cash was $8.1 million and $8.6 million, respectively. |
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Accounts Receivable | Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. Receivables are created upon shipment of an order if the credit card payment is rejected or does not match the order total. As of December 31, 2015 and 2014, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. At December 31, 2015 and 2014, the Company held an allowance for doubtful accounts of $0.3 million and $0.2 million, respectively. |
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Inventories | Inventories Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or market. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. |
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Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization computed using the straight-line method over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Expenditures for maintenance and repairs are charged to expense as incurred. The cost of property and equipment sold or otherwise retired and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in other operating costs in the accompanying Consolidated Statements of Operations. The estimated useful lives of fixed assets are as follows:
(1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes a comparison of future projected cash flows generated by the asset or group of assets with its associated net carrying value. If the net carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value. We determined that no impairment indicators existed during the years ended December 31, 2015 and 2014. |
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Other Assets | Other Assets At December 31, 2015 and 2014, other assets were $3.8 million and $3.6 million, respectively. Included in the December 31, 2015 and 2014 balances were deposits for building leases in various locations of $1.9 million and $1.5 million, respectively. Also included in the December 31, 2015 and 2014 balances were $1.6 million and $1.7 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages. Other assets at each of December 31, 2015 and 2014 also include $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. |
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Notes Payable | Notes Payable Notes payable were $1.8 million at December 31, 2015 as a result of funding from a capital financing agreement related to our investment in computer hardware and software and other financing arrangements. At December 31, 2015, the current portion was $0.7 million and the long-term portion was $1.1 million. |
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Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities were $2.0 million and $2.1 million for the years ending December 31, 2015 and 2014. At December 31, 2015 and 2014, we recorded $0.7 million and $0.8 million, respectively, in other long-term liabilities related to uncertain income tax positions (see Note 8, Income Taxes). Certain operating leases for the Company’s regional office facilities contain a restoration clause that requires the Company to restore the premises to its original condition. At each of December 31, 2015 and 2014, accrued restoration costs related to these leases amounted to $0.4 million. At December 31, 2015 and 2014, the Company also recorded a long-term liability for an estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations of $0.5 million and $0.6 million, respectively (See Note 10, Employee Benefit Plans). |
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Revenue Recognition and Deferred Commissions | Revenue Recognition and Deferred Commissions The Company’s revenue is derived from sales of individual products, sales of its starter and renewal packs, and shipping fees. Substantially all of the Company’s product and pack sales are made to associates at published wholesale prices and to members at discounted published retail prices. The Company records revenue net of any sales taxes and records a reserve for expected sales returns based on its historical experience. The Company recognizes revenue from shipped packs and products upon receipt by the customer. Corporate-sponsored event revenue is recognized when the event is held. The Company defers certain components of its revenue. At December 31, 2015 and December 31, 2014, the Company’s deferred revenue was $8.7 million and $10.9 million, respectively. During the third quarter of 2013, the Company started a loyalty program through which customers earn loyalty points from qualified automatic orders, which can be applied to future purchases. The Company defers the dollar equivalent in revenue of these points until the points are applied or forfeited, which includes an estimate of the percentage of the unvested loyalty points that are expected to be forfeited. During the third quarter 2014, the Company modified the program to allow loyalty points to vest more quickly. The deferred revenue associated with the loyalty program at December 31, 2015 and December 31, 2014 was $8.1 million and $9.7 million, respectively. Deferred revenue consisted primarily of: (i) sales of packs and products shipped but not received by the customers by the end of the respective period; (ii) revenue from the loyalty program; and (iii) prepaid registration fees from customers planning to attend a future corporate-sponsored event. In total current assets, the Company defers commissions on (i) the sales of packs and products shipped but not received by the customers by the end of the respective period and (ii) the loyalty program. Deferred commissions were $3.4 million and $4.5 million at December 31, 2015 and December 31, 2014, respectively.
We estimate a sales return reserve for expected sales refunds based on our historical experience over a rolling six-month period. If actual results differ from our estimated sales return reserve due to various factors, the amount of revenue recorded for each period could be materially affected. Historically, our sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale. Sales returns have historically averaged 1.5% or less of our gross sales. For the year ended December 31, 2015 our sales return reserve consisted of the following (in thousands):
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Shipping and Handling Costs | Shipping and Handling Costs The Company records freight and shipping fees collected from its customers as revenue. The Company records inbound freight as a component of inventory and cost of sales. |
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Commission and Incentive Expenses | Commission and Incentive Expenses Associates earn commissions and incentives based on their direct and indirect commissionable net sales over 13 business periods. Each business period equals 28 days. The Company accrues commissions and incentives when earned by associates and pays commissions on product sales three weeks following the business period end and pays commissions on its pack sales five weeks following the business period end. |
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Advertising Expenses | Advertising Expenses The Company expenses advertising and promotions in selling and administrative expenses when incurred. Advertising and promotional expenses were approximately $5.5 million and $4.9 million, for the years ended December 31, 2015 and 2014, respectively. Educational and promotional items, called sales aids, are sold to associates to assist in their sales efforts and are included in inventories and charged to cost of sales when sold. |
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Research and Development Expenses | Research and Development Expenses The Company expenses research and development expenses as incurred. Research and development expenses related to new product development, enhancement of existing products, clinical studies and trials, Food and Drug Administration compliance studies, general supplies, internal salaries, third-party contractors, and consulting fees were approximately $1.7 million and $1.6 million, respectively, for the years ended December 31, 2015 and 2014. Salaries and contract labor are included in selling and administrative expenses and all other research and development costs are included in other operating costs. |
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Stock-Based Compensation | Stock-Based Compensation The Company currently has one active stock-based compensation plan, which was approved by its shareholders at its 2008 Annual Shareholder’s meeting and amended at the 2010, 2012, and 2014 Annual Shareholder meetings. The Company grants stock options to its employees, consultants, and board members with an exercise price equal to the closing price of its common stock on the date of grant with a term no greater than 10 years. The majority of stock options vest over two or three years. Incentive stock options granted to shareholders who own 10% or more of the Company’s outstanding stock are granted at an exercise price that may not be less than 110% of the closing price of the Company’s common stock on the date of grant and have a term no greater than five years. At the date of grant, the Company determines the fair value of the stock option award and recognizes compensation expense over the requisite service period, or the vesting period of the award. The fair value of the stock option award is calculated using the Black-Scholes option-pricing model. The Company records stock-based compensation expense in selling and administrative expenses. |
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Software Development Costs | Software Development Costs The Company capitalizes qualifying internal payroll and external contracting and consulting costs related to the development of internal use software that are incurred during the application development stage, which includes design of the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project along with post-implementation stages of internal use software are expensed as incurred. The Company amortizes such costs over the estimated useful life of the software, which is three to five years once the software is placed in service. |
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Other Operating Costs | Other Operating Costs Other operating costs include travel, accounting/legal/consulting fees, credit card processing fees, banking fees, off-site storage fees, utilities, and other miscellaneous operating expenses. |
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Income Taxes | Income Taxes The Company determines the provision for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. The Company evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance for the portion of any deferred tax assets where the likelihood of realizing an income tax benefit in the future does not meet the more likely than not criterion for recognition. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. |
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Comprehensive Income and Accumulated Other Comprehensive Income (Loss) | Comprehensive Income and Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Norway, Sweden and Mexico operations, and changes in the pension obligation for its Japanese employees. |
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Concentration Risk | Concentration Risk A significant portion of our revenue is derived from five products: NutriVerus™, PLUS™, Ūth™ Skin Rejuvenation, and our core Ambrotose® complex products, which include the Ambrotose® products and Advanced Ambrotose® products. A decline in sales value of such products could have a material adverse effect on our earnings, cash flows, and financial position. Revenue from these products were as follows for the years ended December 31, 2015 and 2014 (in thousands, except percentages):
Our business is not currently exposed to customer concentration risk given that no independent associate has ever accounted for more than 10% of our consolidated net sales. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, investments, receivables, and restricted cash. The Company utilizes financial institutions that the Company considers to be of high credit quality and periodically evaluates the credit rating of such institutions and the allocation of their investments to minimize exposure to credit concentration risk. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, time deposits, money market investments, receivables, payables, and accrued expenses, approximate their carrying values due to their relatively short maturities. See Note 3 to our Consolidated Financial Statements, Fair Value, for more information. |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated useful lives of fixed assets | The estimated useful lives of fixed assets are as follows:
(1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. |
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Loyalty deferred revenue | Deferred commissions were $3.4 million and $4.5 million at December 31, 2015 and December 31, 2014, respectively.
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Sales return reserve | For the year ended December 31, 2015 our sales return reserve consisted of the following (in thousands):
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Concentration risk | Revenue from these products were as follows for the years ended December 31, 2015 and 2014 (in thousands, except percentages):
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FAIR VALUE (Tables) |
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FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value, assets measured on recurring basis | The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at December 31, 2015 and 2014.
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INVENTORIES (Tables) |
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INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories as of December 31, 2015 and 2014, consisted of the following (in thousands):
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PROPERTY AND EQUIPMENT (Tables) |
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Property and equipment | As of December 31, 2015 and 2014, property and equipment consisted of the following (in thousands):
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CAPITAL LEASE OBLIGATIONS (Tables) |
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Future minimum lease payments | The future minimum lease payments (in thousands) are as follows:
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ACCRUED EXPENSES (Tables) |
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Accrued expenses | As of December 31, 2015 and 2014, accrued expenses consisted of the following (in thousands):
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INCOME TAXES (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | The components of the Company’s income before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands):
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Income tax provision | The components of the Company’s income tax provision for the years ended December 31 are as follows (in thousands):
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Reconciliation of effective income tax rate and United States federal statutory income tax rate | A reconciliation of the Company’s effective income tax rate and the United States federal statutory income tax rate is summarized as follows, for the years ended December 31:
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Deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities consisted of the following at December 31 (in thousands):
(1) The Company’s net operating loss will expire as follows (dollar amounts in thousands): |
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Net operating loss by Jurisdiction |
(1) On March 21, 2014, the Company suspended operations in the Ukraine. |
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Summary of valuation allowance | The valuation allowances presented below (in millions) at December 31, 2015 and 2014, represented a reserve against the Company’s net deferred tax asset the Company believed the “more likely than not” criterion for recognition purposes could not be met. The U.S. valuation allowance decreased due to the usage of foreign tax credits.
(1) On March 21, 2014, the Company suspended operations in the Ukraine. |
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Deferred tax assets (liabilities) classified in Consolidated Balance Sheets | Deferred tax assets (liabilities) are classified in the accompanying Consolidated Balance Sheets of December 31 as follows (in thousands):
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Unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows, for the years ended December 31, 2015 and 2014 (in thousands):
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Tax years subject to examinations | As of December 31, 2015, the tax years that remained subject to examination by a major tax jurisdiction for the Company’s most significant subsidiaries were as follows:
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TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES [Abstract] | ||||||||||||||||||||||||||||
Related party transactions | The Company made cash donations and sold products to MannaRelief as follows:
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EMPLOYEE BENEFIT PLANS (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plan's projected benefit obligation and valuation of plan assets | The Benefit Plan’s projected benefit obligation and valuation of plan assets were as follows for the years ended December 31 (in thousands):
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Weighted-average assumptions to determine the benefit obligation and net cost | The weighted-average assumptions to determine the benefit obligation and net cost are as follows:
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Pension expense for Benefit Plan included in selling, general and administrative expenses | Pension expense for the Benefit Plan is included in selling, general and administrative expenses in the Consolidated Statements of Operations and is comprised of the following for the years ended December 31 (in thousands):
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Benefits expected to be paid by the Benefit Plan | As of December 31, 2015, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands):
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STOCK OPTION PLAN (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTION PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in stock options outstanding | A summary of changes in stock options outstanding during the year ended December 31, 2015, is as follows:
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Assumptions used to calculate compensation expense and fair value of stock options granted | The following assumptions were used to calculate the compensation expense and the calculated fair value of stock options granted each year:
(1) The Company declared no dividends in 2015 or 2014. |
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Share-based compensation expense | The Company recorded the following amounts related to the expense of the fair values of options during the years ended December 31, 2015 and 2014 (in thousands):
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Unrecognized compensation cost | As of December 31, 2015, the Company had approximately $0.6 million of total unrecognized compensation expense related to stock options currently outstanding, to be recognized in future years, ending December 31, as follows (in thousands):
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Future minimum rental commitments for non-cancelable operating leases | Approximate future minimum rental commitments for non-cancelable operating leases (in thousands) are as follows:
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SHAREHOLDERS' EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive income (loss) | The after-tax components of accumulated other comprehensive income (loss), are as follows (in thousands):
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SEGMENT INFORMATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales shipped to customers by geographic region | Consolidated net sales shipped to customers in these regions, along with pack and product information for the years ended December 31, are as follows (in millions, except percentages):
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Product and pack information |
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Long-lived assets, by geographic region | Long-lived assets by region, which include property and equipment and construction in progress for the Company and its subsidiaries, as of December 31, reside in the following regions, as follows (in millions):
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Inventory balances, by country | Inventory balances by region, which consist of raw materials, and finished goods, including promotional materials, and offset by obsolete inventories, for the Company and its subsidiaries, reside in the following regions as of December 31, as follows (in millions):
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FAIR VALUE (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash | $ 8,100 | $ 8,600 |
Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money Market Funds - Fidelity, US | 319 | 392 |
Interest bearing deposits - various banks | 14,134 | 12,322 |
Cash and cash equivalents | 8,281 | 6,159 |
Restricted cash | 737 | 738 |
Long-term restricted cash | 5,435 | 5,817 |
Total | 14,453 | 12,714 |
Recurring Basis [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money Market Funds - Fidelity, US | 319 | 392 |
Interest bearing deposits - various banks | 14,134 | 12,322 |
Cash and cash equivalents | 8,281 | 6,159 |
Restricted cash | 737 | 738 |
Long-term restricted cash | 5,435 | 5,817 |
Total | 14,453 | 12,714 |
Recurring Basis [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money Market Funds - Fidelity, US | 0 | 0 |
Interest bearing deposits - various banks | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | 0 | 0 |
Recurring Basis [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money Market Funds - Fidelity, US | 0 | 0 |
Interest bearing deposits - various banks | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | $ 0 | $ 0 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
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INVENTORIES [Abstract] | ||
Raw materials | $ 1,187 | $ 2,118 |
Finished goods | 9,277 | 10,615 |
Inventory reserves for obsolescence | (1,265) | (2,142) |
Total | $ 9,199 | $ 10,591 |
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Summary of property and equipment [Abstract] | ||
Property and equipment, gross | $ 76,521 | $ 75,546 |
Less accumulated depreciation and amortization | (72,673) | (73,065) |
Property and equipment, net | 3,848 | 2,481 |
Construction in progress | 839 | 1,622 |
Total | 4,687 | 4,103 |
Office Furniture and Equipment [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 8,576 | 8,666 |
Computer Hardware [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 7,747 | 7,738 |
Computer Software [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 47,724 | 46,791 |
Automobiles [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 81 | 81 |
Leasehold Improvements [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 12,393 | 12,270 |
Construction in Process [Member] | ||
Summary of property and equipment [Abstract] | ||
Construction in progress | $ 839 | $ 1,622 |
CAPITAL LEASE OBLIGATIONS (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
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CAPITAL LEASE OBLIGATIONS [Abstract] | ||
Net book value of leased assets | $ 1,100 | $ 1,300 |
Schedule of future minimum lease payments [Abstract] | ||
2016 | 492 | |
2017 | 370 | |
2018 | 205 | |
2019 | 52 | |
2020 | 13 | |
Total future minimum lease payments | 1,132 | |
Less: Amounts representing interest (effective interest rate 4.74%) | (73) | |
Present value of minimum lease payments | 1,059 | |
Current portion of capital lease obligations | 447 | 901 |
Long-term portion of capital lease obligations | $ 612 | $ 852 |
Capital Lease [Member] | ||
Capital Leased Assets [Line Items] | ||
Effective interest rate | 4.74% |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Summary of accrued expenses [Abstract] | ||
Accrued asset purchases | $ 277 | $ 291 |
Accrued compensation | 1,620 | 2,180 |
Accrued royalties | 68 | 105 |
Accrued sales and other taxes | 2,323 | 1,193 |
Other accrued operating expenses | 562 | 786 |
Customer deposits and sales returns | 153 | 211 |
Accrued travel expenses related to corporate events | 271 | 107 |
Accrued shipping and handling costs | 257 | 344 |
Rent expense | 76 | 147 |
Accrued legal and accounting fees | 614 | 992 |
Total | $ 6,221 | $ 6,356 |
INCOME TAXES, INCOME BEFORE INCOME TAXES AND INCOME TAX PROVISION (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Components of Company's loss before income taxes [Abstract] | ||
United States | $ 769 | $ 2,044 |
Foreign | 7,430 | 7,777 |
Income before income taxes | 8,199 | 9,821 |
Current provision (benefit) [Abstract] | ||
Federal | (336) | 2,433 |
State | 21 | 43 |
Foreign | 2,518 | 2,547 |
Total | 2,203 | 5,023 |
Deferred provision (benefit) [Abstract] | ||
Federal | 191 | (1,792) |
State | 72 | 349 |
Foreign | (106) | (255) |
Total | 157 | (1,698) |
Total | $ 2,360 | $ 3,325 |
INCOME TAXES, RECONCILIATION OF STATUTORY TO EFFECTIVE TAX RATE (Details) |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Reconciliation of effective income tax rate and United States federal statutory income tax rate [Abstract] | ||
Federal statutory income taxes | 35.00% | 35.00% |
State income taxes, net of federal benefit | 1.00% | 3.50% |
Difference in foreign and United States tax on foreign operations | (14.80%) | (16.10%) |
Effect of changes in valuation allowance for net operating loss carryforwards | (8.70%) | 14.30% |
Effect of change in uncertain tax positions (net) | (0.20%) | 0.50% |
Federal Sub-Part F Income from foreign operations | 5.10% | 2.90% |
Foreign exchange | 5.30% | (0.30%) |
Other | 6.20% | (5.90%) |
Total | 28.90% | 33.90% |
INCOME TAXES, DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||
Current [Abstract] | |||||||
Deferred revenue | $ 567,000 | $ 453,000 | |||||
Inventory capitalization | 209,000 | 171,000 | |||||
Inventory reserves | 376,000 | 762,000 | |||||
Accrued expenses | 974,000 | 697,000 | |||||
Other | 205,000 | 127,000 | |||||
Total current deferred tax assets | 2,331,000 | 2,210,000 | |||||
Noncurrent [Abstract] | |||||||
Depreciation and amortization | 1,788,000 | 1,867,000 | |||||
Net operating loss | [1] | 5,378,000 | 5,842,000 | ||||
Deferred revenue | 16,000 | 28,000 | |||||
Non-cash accounting charges related to stock options and warrants | 684,000 | 628,000 | |||||
Accrued expenses | 239,000 | 350,000 | |||||
Foreign tax credit carryover | 3,568,000 | 3,855,000 | |||||
Other | 620,000 | 506,000 | |||||
Total noncurrent deferred tax assets | 12,293,000 | 13,076,000 | |||||
Total deferred tax assets | 14,624,000 | 15,286,000 | |||||
Valuation allowance | (9,028,000) | (9,745,000) | |||||
Total deferred tax assets, net of valuation allowance | 5,596,000 | 5,541,000 | |||||
Current [Abstract] | |||||||
Prepaid expenses | 406,000 | 413,000 | |||||
Deferred commissions | 846,000 | 769,000 | |||||
Other | 10,000 | ||||||
Total current deferred tax liabilities | 1,252,000 | 1,192,000 | |||||
Noncurrent [Abstract] | |||||||
Internally-developed software | 266,000 | 11,000 | |||||
Depreciation and amortization | 1,000 | 2,000 | |||||
Sub-Part F income deferred | 0 | 0 | |||||
Other | 0 | 24,000 | |||||
Total noncurrent deferred tax liabilities | 267,000 | 37,000 | |||||
Total deferred tax liabilities | 1,519,000 | 1,229,000 | |||||
Operating Loss Carryforwards [Line Items] | |||||||
Foreign tax credit carryforward | 3,100 | ||||||
Charitable contribution carryforward | 500 | ||||||
Colombia [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | 64,000 | ||||||
Tax Effected NOL | $ 22,000 | ||||||
Expiration Years | 2019 | ||||||
Mexico [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | $ (2,500,000) | (2,700,000) | |||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | 8,482,000 | ||||||
Tax Effected NOL | $ 2,545,000 | ||||||
Expiration Years | 2020-2024 | ||||||
Norway [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | $ 0 | (100,000) | |||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | 249,000 | ||||||
Tax Effected NOL | $ 67,000 | ||||||
Expiration Years | Indefinite | ||||||
Singapore [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | $ 131,000 | ||||||
Tax Effected NOL | $ 22,000 | ||||||
Expiration Years | Indefinite | ||||||
Sweden [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | $ (100,000) | (100,000) | |||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | 513,000 | ||||||
Tax Effected NOL | $ 113,000 | ||||||
Expiration Years | Indefinite | ||||||
Switzerland [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | $ (1,000,000) | (1,200,000) | |||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | 11,371,000 | ||||||
Tax Effected NOL | $ 1,028,000 | ||||||
Expiration Years | 2016-2020 | ||||||
Taiwan [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | $ (1,200,000) | (1,200,000) | |||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | 7,133,000 | ||||||
Tax Effected NOL | $ 1,213,000 | ||||||
Expiration Years | 2016-2024 | ||||||
Ukraine [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | [2] | $ (100,000) | (100,000) | ||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | [2] | 581,000 | |||||
Tax Effected NOL | [2] | $ 105,000 | |||||
Expiration Years | [2] | Indefinite | |||||
United States (states) [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Gross NOL | $ 11,079,000 | ||||||
Tax Effected NOL | $ 277,000 | ||||||
Expiration Years | 2016-2032 | ||||||
United States [Member] | |||||||
Noncurrent [Abstract] | |||||||
Valuation allowance | $ (4,000,000) | $ (4,300,000) | |||||
|
INCOME TAXES, VALUATION ALLOWANCE (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
||
---|---|---|---|---|
Valuation Allowance [Line Items] | ||||
Valuation allowance | $ 9,028 | $ 9,745 | ||
Mexico [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | 2,500 | 2,700 | ||
Norway [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | 0 | 100 | ||
Sweden [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | 100 | 100 | ||
Switzerland [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | 1,000 | 1,200 | ||
Taiwan [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | 1,200 | 1,200 | ||
United States [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | 4,000 | 4,300 | ||
Ukraine [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | [1] | 100 | 100 | |
Other Jurisdiction [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance | $ 100 | $ 0 | ||
|
INCOME TAXES, DEFERRED TAX ASSETS (LIABILITIES) CLASSIFIED IN CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred tax assets liabilities classified in Consolidated Balance Sheets [Abstract] | ||
Current deferred tax assets | $ 460 | $ 1,141 |
Noncurrent deferred tax assets | 3,725 | 3,320 |
Current deferred tax liabilities | (84) | (123) |
Other long-term liabilities | (24) | (26) |
Net deferred tax assets | $ 4,077 | $ 4,312 |
INCOME TAXES, UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
INCOME TAXES [Abstract] | ||
Uncertain income tax positions recorded in current liabilities | $ 100 | |
Uncertain income tax positions recorded in noncurrent liabilities | 700 | $ 800 |
Unrecognized tax benefits that would impact effective tax rate | 600 | |
Reconciliation of beginning and ending amount of unrecognized tax benefits [Roll Forward] | ||
Balance as of January 1 | 803 | 738 |
Additions for tax positions related to the current year | 0 | 1 |
Additions for tax positions of prior years | 0 | 111 |
Reductions of tax positions of prior years | (71) | (47) |
Settlements | (17) | 0 |
Balance as of December 31 | 715 | 803 |
Accrued Penalties and Interest [Abstract] | ||
Accrued interest and penalties in the consolidated balance sheets | 200 | 100 |
Accrued interest and penalties in the consolidated statement of operations | 26 | $ 56 |
Decrease in unrecognized tax benefits due to the lapse of statutes of limitations | $ 100 |
INCOME TAXES, TAX YEARS SUBJECT TO EXAMINATIONS (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Australia [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2011 |
Australia [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Canada [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2011 |
Canada [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Denmark [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2012 |
Denmark [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Japan [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2012 |
Japan [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Mexico [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2011 |
Mexico [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Norway [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2009 |
Norway [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Republic of Korea [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2010 |
Republic of Korea [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Singapore [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2011 |
Singapore [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
South Africa [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2012 |
South Africa [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Sweden [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2010 |
Sweden [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Switzerland [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2010 |
Switzerland [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
Taiwan [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2010 |
Taiwan [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
United Kingdom [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2009 |
United Kingdom [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
United States [Member] | Earliest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2012 |
United States [Member] | Latest Open Tax Year [Member] | |
Income Tax Examination [Line Items] | |
Open tax years | 2015 |
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Directors, Officers and Family Members on M5M Foundation Board [Member] | |||
Cash donations and sold products [Abstract] | |||
Cash donations | $ 900,000 | $ 500,000 | |
Son of the Chairman of the Board [Member] | |||
Related Party Transaction [Line Items] | |||
Officers' compensation | 251,000 | ||
Member of the Board of Directors and Family [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 3,200,000 | 2,900,000 | |
Member of the Board of Directors [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 2,900,000 | 2,600,000 | |
Family members of a Member of the Board of Directors [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 300,000 | 300,000 | |
Son of member of Board of Directors [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 200,000 | 200,000 | |
Daughter and Daughter-in-law of Member of Board of Directors [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 100,000 | 100,000 | |
Second son of member of Board of Directors [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 100,000 | ||
Spouse of President [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | $ 200,000 | 200,000 | |
Founder and Former Chairman of the Board [Member] | |||
Related Party Transaction [Line Items] | |||
Beneficial ownership | 5.00% | 18.00% | |
Cash donations and sold products [Abstract] | |||
Consulting services charged | 100,000 | ||
MannaRelief [Member] | |||
Cash donations and sold products [Abstract] | |||
Sold Products | $ 0 | 300,000 | |
Cash donations | $ 0 | $ 300,000 |
EMPLOYEE BENEFIT PLANS (Details) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015
USD ($)
Age
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
EMPLOYEE BENEFIT PLANS [Abstract] | ||||
Service period, minimum | 3 months | |||
Employees eligible age under plan, minimum | Age | 21 | |||
Maximum annual contribution per employee | 100.00% | |||
Vesting period of employer's matching contributions | 5 years | |||
Contributions by employer | $ 200,000 | $ 200,000 | ||
Projected benefit obligation [Roll Forward] | ||||
Balance, beginning of year | 549,000 | 629,000 | ||
Service cost | 75,000 | 88,000 | ||
Interest cost | 3,000 | 3,000 | ||
Liability losses | (4,000) | (6,000) | ||
Benefits paid to participants | (141,000) | (122,000) | ||
Special termination benefit | 0 | 34,000 | ||
Foreign currency | (3,000) | (77,000) | ||
Balance, end of year | 479,000 | 549,000 | ||
Plan assets [Roll Forward] | ||||
Fair value, beginning of year | 0 | 0 | ||
Company contributions | 141,000 | 122,000 | ||
Benefits paid to participants | (141,000) | (122,000) | ||
Fair value, end of year | 0 | 0 | ||
Funded status of the Benefit Plan [Abstract] | ||||
Benefit obligation | (549,000) | (549,000) | $ (479,000) | $ (549,000) |
Fair value of plan assets | 0 | 0 | 0 | 0 |
Excess of benefit obligation over fair value of plan assets | (479,000) | (549,000) | ||
Amounts recognized in the accompanying Consolidated Balance Sheets [Abstract] | ||||
Accrued benefit liability | (479,000) | (549,000) | ||
Transition obligation and unrealized gain | (339,000) | (372,000) | ||
Net amount recognized in the consolidated balance sheets | (818,000) | (921,000) | ||
Other changes recognized in comprehensive income (loss) [Abstract] | ||||
Net periodic cost | 43,000 | 85,000 | ||
Current year gain | (4,000) | (6,000) | ||
Amortization of transition obligation | (4,000) | (4,000) | ||
Total recognized in other comprehensive income (loss) | (8,000) | (10,000) | ||
Total recognized in comprehensive income (loss) | 35,000 | 75,000 | ||
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain (loss) [Abstract] | ||||
Transition obligation | 22,000 | 13,000 | ||
Prior service cost | 313,000 | 353,000 | ||
Net actuarial gain | 4,000 | 6,000 | ||
Total recognized in accumulated other comprehensive gain (loss) | 339,000 | 372,000 | ||
2016 estimated amounts of amortized transition obligation [Abstract] | ||||
Transition obligation | (4,000) | |||
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets [Abstract] | ||||
Projected benefit obligation | 479,000 | 549,000 | ||
Accumulated benefit obligation | 479,000 | 549,000 | ||
Fair value of plan assets | $ 0 | $ 0 | ||
Weighted-average assumptions to determine the benefit obligation and net cost [Abstract] | ||||
Discount rate | 0.40% | 0.50% | ||
Rate of increase in compensation levels | 0.00% | 0.00% | ||
Pension expense for Benefit Plan included in selling, general and administrative expenses [Abstract] | ||||
Service cost | 75,000 | 88,000 | ||
Interest cost | 3,000 | 3,000 | ||
Amortization of transition obligation | 4,000 | 4,000 | ||
Gain | 0 | 0 | ||
Special termination | 0 | 34,000 | ||
Prior service cost | (39,000) | (44,000) | ||
Benefit adjustment | 0 | 0 | ||
Total pension expense | 43,000 | $ 85,000 | ||
Expected employer's contributions in 2016 | $ 53,000 | |||
Period over which benefits are expected to be paid | 10 years | |||
Benefits expected to be paid by the Benefit Plan [Abstract] | ||||
2016 | $ 53,000 | |||
2017 | 52,000 | |||
2018 | 49,000 | |||
2019 | 49,000 | |||
2020 | 43,000 | |||
Next five years | 368,000 | |||
Total expected benefits to be paid | $ 614,000 |
STOCK OPTION PLAN (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
May. 28, 2014
shares
|
Dec. 31, 2015
USD ($)
Plan
$ / shares
shares
|
Dec. 31, 2014
USD ($)
$ / shares
shares
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of active stock based compensation plan | Plan | 1 | ||||
Percentage of stock option ownership considered for higher exercise price of option | 10.00% | ||||
Option exercise price as percentages of closing exercise price of stock for specific shareholders | 110.00% | ||||
Number of shares authorized (in shares) | shares | 100,000 | ||||
Number of shares adjusted due to reverse stock split (in shares) | shares | 10 | ||||
Increase in number of shares authorized (in shares) | shares | 130,000 | 100,000 | |||
Number of shares available for grant (in shares) | shares | 127,124 | ||||
Non-vested shares (in shares) | shares | 77,000 | 121,000 | |||
New shares issued (in shares) | shares | 5,001 | ||||
Number of Options [Roll Forward] | |||||
Outstanding at beginning of year (in shares) | shares | 249,000 | ||||
Granted (in shares) | shares | 37,000 | ||||
Exercised (in shares) | shares | (5,000) | ||||
Forfeited or expired (in shares) | shares | (55,000) | ||||
Outstanding at end of year (in shares) | shares | 226,000 | 249,000 | |||
Options exercisable at year end (in shares) | shares | 148,000 | ||||
Weighted average exercise price [Roll Forward] | |||||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 16.71 | ||||
Granted (in dollars per share) | $ / shares | 19.18 | ||||
Exercised (in dollars per share) | $ / shares | 5.72 | ||||
Forfeited or expired (in dollars per share) | $ / shares | 19.78 | ||||
Outstanding at end of year (in dollars per share) | $ / shares | 16.61 | $ 16.71 | |||
Options exercisable at year end (in dollars per share) | $ / shares | $ 16.95 | ||||
Weighted average remaining contractual life (in years) [Abstract] | |||||
Outstanding at end of year | 7 years 1 month 2 days | ||||
Options exercisable at year end | 6 years 4 months 2 days | ||||
Aggregate intrinsic value [Abstract] | |||||
Outstanding at end of year | $ 505 | ||||
Options exercisable at year end | $ 282 | ||||
Assumptions used to calculate compensation expense and fair value of stock options granted [Abstract] | |||||
Dividend yield | [1] | 0.00% | 0.00% | ||
Risk-free interest rate, minimum | 1.20% | 1.30% | |||
Risk-free interest rate, maximum | 1.60% | 1.50% | |||
Expected market price volatility, minimum | 79.10% | 77.10% | |||
Expected market price volatility, maximum | 80.10% | 80.50% | |||
Average expected life of stock options | 4 years 6 months | 4 years 6 months | |||
Dividends declared | $ 0 | $ 0 | |||
Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 11.90 | $ 11.25 | |||
Total fair value of shares vested | $ 600 | $ 100 | |||
Summary of amounts related to the expense of the fair values of options [Abstract] | |||||
Selling, general and administrative expenses and income from operations before income taxes | 575 | 512 | |||
Benefit for income taxes | (137) | (137) | |||
Effect on net income | 438 | 375 | |||
Unrecognized compensation expense [Abstract] | |||||
Total gross unrecognized compensation expense in 2016 | 352 | ||||
Total gross unrecognized compensation expense in 2017 | 176 | ||||
Total gross unrecognized compensation expense in 2018 | 99 | ||||
Total unrecognized compensation expense | 627 | ||||
Tax benefit associated with unrecognized compensation expense in 2016 | 54 | ||||
Tax benefit associated with unrecognized compensation expense in 2017 | 18 | ||||
Tax benefit associated with unrecognized compensation expense in 2018 | 0 | ||||
Total tax benefit associated with unrecognized compensation expense | 72 | ||||
Total net unrecognized compensation expense in 2016 | 298 | ||||
Total net unrecognized compensation expense in 2017 | 158 | ||||
Total net unrecognized compensation expense in 2018 | 99 | ||||
Total net unrecognized compensation expense | $ 555 | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of stock options | 2 years | ||||
Percentage of stock option ownership considered for higher exercise price of option | 10.00% | ||||
Expiration period of stock option plan | 5 years | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of stock options | 3 years | ||||
Option exercise price as percentages of closing exercise price of stock for specific shareholders | 110.00% | ||||
Expiration period of stock option plan | 10 years | ||||
Intrinsic value of exercised options | $ 100 | $ 200 | |||
Board of Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant (in shares) | shares | 1,000 | ||||
|
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
Lease expiration date | Aug. 31, 2023 | |
Total rent expense | $ 3,600 | $ 3,900 |
Summary of future minimum rental commitments for non-cancelable operating leases [Abstract] | ||
2016 | 1,729 | |
2017 | 1,430 | |
2018 | 787 | |
2019 | 297 | |
2020 | 112 | |
Thereafter | 0 | |
Total | 4,355 | |
Royalty and Consulting Agreements [Abstract] | ||
Payment of royalties | 200 | $ 300 |
Payable amount on termination of employment relationships with executives | $ 1,500 | |
Purchase Commitments Agreement with InB:Biotechnologies, Inc. [Member] | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Supply agreement period | 10 years | |
Purchase commitment aggregate amount | $ 5,000 |
LITIGATION (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Feb. 18, 2015 |
Dec. 31, 2015 |
May. 29, 2015 |
|
Samuel L. Caster and Wonder Enterprises, LLC [Member] | |||
Loss Contingencies [Line Items] | |||
Minimum estimated damages | $ 500,000.00 | ||
Maximum estimated damages | $ 3,500,000.00 | ||
Pending Litigation [Member] | Ms. Diana Anselmo and New Day Today Corporation [Member] | |||
Loss Contingencies [Line Items] | |||
Damages sought | $ 1,000,000 | ||
Pending Litigation [Member] | Busan Custom Office [Member] | |||
Loss Contingencies [Line Items] | |||
Damages paid | $ 1,000,000 |
SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Mar. 10, 2016 |
Aug. 28, 2006 |
Jun. 30, 2004 |
May. 19, 1998 |
|
Preferred Stock [Abstract] | ||||||
Common stock, shares authorized (in shares) | 99,000,000 | 99,000,000 | 100,000,000 | |||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Shares issued as compensation for the work (in shares) | 1,000 | |||||
Shares issued due to exercise of stock options (in shares) | 5,001 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Beginning balance | $ (109) | |||||
Current-period change before reclassifications | 815 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | (31) | |||||
Income tax provision | 11 | $ 11 | ||||
Ending balance | $ 686 | (109) | ||||
June 2004 Plan [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program, repurchase authorization | the lesser of (i) 131,756 shares of its common stock and (ii) $1.3 million of its shares | |||||
Number of common shares authorized to be repurchased (in shares) | 131,756 | |||||
Stock repurchase program, authorized amount | $ 1,300 | |||||
June 2004 Plan [Member] | Subsequent Event [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program, remaining number of shares authorized to be repurchased (in shares) | 19,084 | |||||
Stock repurchased since inception shares (in shares) | 112,672 | |||||
August 2006 Plan [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program, repurchase authorization | up to $20 million of its outstanding shares | |||||
Stock repurchase program, authorized amount | $ 20,000 | |||||
Common stock repurchased (in shares) | 0 | |||||
Foreign Currency Translation [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Beginning balance | $ (457) | |||||
Current-period change before reclassifications | 815 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | |||||
Income tax provision | 0 | |||||
Ending balance | 358 | (457) | ||||
Pension Postretirement Benefit Obligation [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Beginning balance | 348 | |||||
Current-period change before reclassifications | 0 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | (31) | |||||
Income tax provision | 11 | |||||
Ending balance | $ 328 | $ 348 |
EARNINGS PER SHARE (Details) - $ / shares shares in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Average common stock close price (in dollars per share) | $ 20.17 | $ 16.66 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.1 |
SEGMENT INFORMATION (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015
USD ($)
Region
Segment
Country
|
Dec. 31, 2014
USD ($)
|
|
SEGMENT INFORMATION [Abstract] | ||
Number of operating segments | Segment | 1 | |
Minimum percentage of revenue considered for accounted of major customer | 10.00% | |
Number of countries in which company operates facilities | Country | 13 | |
Number of countries in which company sells products | Country | 25 | |
Number of regions in which company sells products | Region | 3 | |
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | $ 180,300 | $ 190,100 |
Percent of total revenue | 100.00% | 100.00% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | $ 4,687 | $ 4,103 |
Inventory, by Country [Abstract] | ||
Inventories, net | 9,199 | 10,591 |
Consolidated Product Sales [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 143,100 | 155,300 |
Consolidated Pack Sales [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 31,700 | 27,800 |
Consolidated Other, Including Freight [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 5,500 | 7,000 |
Reportable Geographical Components [Member] | North America [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | $ 73,300 | $ 80,800 |
Percent of total revenue | 40.70% | 42.50% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | $ 3,500 | $ 3,100 |
Inventory, by Country [Abstract] | ||
Inventories, net | 3,400 | 4,000 |
Reportable Geographical Components [Member] | Asia/Pacific [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | $ 91,400 | $ 92,400 |
Percent of total revenue | 50.70% | 48.60% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | $ 1,100 | $ 800 |
Inventory, by Country [Abstract] | ||
Inventories, net | 4,300 | 4,300 |
Reportable Geographical Components [Member] | EMEA [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | $ 15,600 | $ 16,900 |
Percent of total revenue | 8.60% | 8.90% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | $ 100 | $ 200 |
Inventory, by Country [Abstract] | ||
Inventories, net | $ 1,500 | $ 2,300 |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Allowance for Doubtful Accounts [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | $ 213 | $ 142 |
Additions Charged to Costs and Expenses | 369 | 579 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | (321) | (508) |
Balance at end of year | 261 | 213 |
Allowance for Obsolete Inventories [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | 2,142 | 2,009 |
Additions Charged to Costs and Expenses | 480 | 2,124 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | (1,357) | (1,991) |
Balance at end of year | 1,265 | 2,142 |
Valuation Allowance for Deferred Tax Assets [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | 9,745 | 5,264 |
Additions Charged to Costs and Expenses | 180 | 5,344 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | (897) | (863) |
Balance at end of year | 9,028 | 9,745 |
Reserve for Sales Returns [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | 207 | 238 |
Additions Charged to Costs and Expenses | 1,446 | 1,628 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | (1,506) | (1,659) |
Balance at end of year | $ 147 | $ 207 |
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