CONSOLIDATED BALANCE SHEETS
| CONSOLIDATED BALANCE SHEETS (USD $) | ||
| In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
| ASSETS | ||
| Cash and cash equivalents | $22,577 | $30,945 |
| Restricted cash | 2,350 | 1,864 |
| Accounts receivable, net of allowance of $16 and $23 in 2009 and 2008, respectively | 287 | 291 |
| Income tax receivable | 3,025 | 3,531 |
| Inventories, net | 29,427 | 31,313 |
| Prepaid expenses and other current assets | 3,724 | 3,946 |
| Deferred income tax assets | 4,866 | 5,632 |
| Total current assets | 66,256 | 77,522 |
| Property and equipment, net | 29,547 | 36,202 |
| Construction in progress | 630 | 840 |
| Long-term restricted cash | 7,075 | 7,579 |
| Other assets | 2,516 | 1,456 |
| Long-term deferred income tax assets | 516 | 459 |
| Total assets | 106,540 | 124,058 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current portion of capital leases | 843 | 131 |
| Accounts payable | 6,695 | 5,067 |
| Accrued expenses | 21,904 | 24,324 |
| Commissions and incentives payable | 14,030 | 11,453 |
| Taxes payable | 1,699 | 873 |
| Current deferred tax liability | 225 | 192 |
| Deferred revenue | 3,892 | 3,476 |
| Total current liabilities | 49,288 | 45,516 |
| Capital leases, excluding current portion | 1,272 | 155 |
| Long-term deferred income tax liabilities | 3,616 | 6,075 |
| Other long-term liabilities | 3,446 | 3,583 |
| Total liabilities | 57,622 | 55,329 |
| Shareholders' equity | ||
| Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding | 0 | 0 |
| Common stock, $0.0001 par value, 99,000,000 shares authorized, 27,687,882 shares issued and 26,480,788 shares outstanding in 2009, and 27,667,882 shares issued and 26,460,788 shares outstanding in 2008. | 3 | 3 |
| Additional paid-in capital | 41,243 | 40,753 |
| Retained earnings | 23,593 | 44,170 |
| Accumulated other comprehensive loss | (1,130) | (1,406) |
| Less treasury stock, at cost, 1,207,094 shares in 2009 and 2008 | (14,791) | (14,791) |
| Total shareholders' equity | 48,918 | 68,729 |
| Total liabilities and shareholders' equity | $106,540 | $124,058 |
PARENTHETICAL DATA TO THE CONSO
| PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEETS (USD $) | ||
| In Thousands, except Share data | Sep. 30, 2009
| Dec. 31, 2008
|
| ASSETS | ||
| Allowance for doubtful Accounts Receivable | $16 | $23 |
| Shareholders' equity | ||
| Preferred stock, $0.01 par value | 0.01 | 0.01 |
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock - shares issued | 0 | 0 |
| Preferred stock - shares outstanding | 0 | 0 |
| Common stock, $0.0001 par value | 0.0001 | 0.0001 |
| Common stock, shares authorized | 99,000,000 | 99,000,000 |
| Common stock, shares issued | 27,687,882 | 27,667,882 |
| Common stock, shares outstanding | 26,480,788 | 26,460,788 |
| Treasury stock, shares in 2009 and 2008 | 1,207,094 | 1,207,094 |
CONSOLIDATED STATEMENTS OF OPER
| CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | ||||
| In Thousands, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| Net sales | $71,295 | $77,991 | $219,640 | $256,223 |
| Cost of sales | 11,923 | 11,105 | 35,944 | 37,014 |
| Commissions and incentives | 35,268 | 32,396 | 115,413 | 116,256 |
| Total cost of sales | 47,191 | 43,501 | 151,357 | 153,270 |
| Gross profit | 24,104 | 34,490 | 68,283 | 102,953 |
| Operating expenses: | ||||
| Selling and administrative | 17,748 | 18,753 | 53,403 | 63,349 |
| Depreciation and amortization | 3,085 | 3,172 | 9,357 | 9,225 |
| Other operating | 11,842 | 11,493 | 30,831 | 49,530 |
| Total operating expenses | 32,675 | 33,418 | 93,591 | 122,104 |
| Income (loss) from operations | (8,571) | 1,072 | (25,308) | (19,151) |
| Interest income | 39 | 266 | 182 | 1,219 |
| Other income (expense), net | 859 | (2,047) | 822 | (2,450) |
| Loss before income taxes | (7,673) | (709) | (24,304) | (20,382) |
| (Provision) benefit for income taxes | (1,534) | 280 | 4,785 | 7,134 |
| Net loss | ($9,207) | ($429) | ($19,519) | ($13,248) |
| Loss per share: | ||||
| Basic | -0.35 | -0.02 | -0.74 | -0.5 |
| Diluted | -0.35 | -0.02 | -0.74 | -0.5 |
| Weighted-average common shares outstanding: | ||||
| Basic | 26,464 | 26,461 | 26,462 | 26,461 |
| Diluted | 26,464 | 26,461 | 26,462 | 26,461 |
CONSOLIDATED STATEMENTS OF SHAR
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS) (USD $) | ||||||
| In Thousands | Common Stock Outstanding
| Additional paid in capital
| Retained Earnings
| Accumulated Other Comprehensive Income
| Treasury stock
| Total
|
| Balance - beginning of period (in shares) at Dec. 31, 2008 | 26,461 | 1,207 | ||||
| Balance - beginning of period at Dec. 31, 2008 | $3 | $40,753 | $44,170 | ($1,406) | ($14,791) | $68,729 |
| Tax shortfall from expiration of stock options | 0 | (13) | 0 | 0 | 0 | (13) |
| Proceeds from stock options exercised | 66 | 66 | ||||
| Proceeds from stock options exercised (in shares) | 20 | |||||
| Charge related to stock based compensation | 0 | 437 | 0 | 0 | 0 | 437 |
| Declared dividends of $0.04 per common share | 0 | 0 | (1,058) | 0 | (1,058) | |
| Components of comprehensive loss: | ||||||
| Foreign currency translations | 0 | 0 | 0 | 276 | 276 | |
| Net loss | 0 | 0 | (19,519) | 0 | (19,519) | |
| Total comprehensive loss | 0 | (19,243) | ||||
| Balance - end of period at Sep. 30, 2009 | $3 | $41,243 | $23,593 | ($1,130) | ($14,791) | $48,918 |
| Balance - end of period (in shares) at Sep. 30, 2009 | 26,481 | 1,207 |
PARENTHETICAL DATA TO CONSOLIDA
| PARENTHETICAL DATA TO CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS) (USD $) | |
| 9 Months Ended
Sep. 30, 2009 | |
| per common share (in dollars per share) | 0.04 |
CONSOLIDATED STATEMENTS OF CASH
| CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
| In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net loss | ($19,519) | ($13,248) |
| Adjustments to reconcile net loss to net cash used in operating ativities: | ||
| Depreciation and amortization | 9,357 | 9,225 |
| Provision for doubtful accounts | (7) | 34 |
| Provision for inventory losses | 821 | 1,142 |
| Loss on disposal of assets | 94 | 468 |
| Accounting charge related to stock-based compensation | 437 | 597 |
| Deferred income taxes | (1,556) | (3,150) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 12 | 298 |
| Income tax receivable | 517 | (3,593) |
| Inventories | 1,265 | (6,890) |
| Prepaid expenses and other current assets | 2,220 | 2,410 |
| Other assets | (1,022) | (39) |
| Accounts payable | 1,630 | (630) |
| Accrued expenses | (2,635) | 3,636 |
| Taxes payable | 774 | (5,635) |
| Commissions and incentives payable | 2,505 | (1,721) |
| Deferred revenue | 399 | (906) |
| Net cash used in operating activities | (4,708) | (18,002) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of property and equipment | (2,500) | (4,452) |
| Sale of investments | 0 | 20,350 |
| Purchase of investments | 0 | (7,400) |
| Change in restricted cash | 389 | 1,610 |
| Net cash provided by (used in) investing activities | (2,111) | 10,108 |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Payment of cash dividends | 1,058 | 5,293 |
| Proceeds from stock options | 66 | 0 |
| Repayment of capital lease obligations | 273 | 82 |
| Net cash used in financing activities | (1,265) | (5,375) |
| Effect of exchange rate changes on cash and cash equivalents | (284) | 1,148 |
| Net decrease in cash and cash equivalents | (8,368) | (12,121) |
| Cash and cash equivalents at the beginning of period | 30,945 | 47,103 |
| Cash and cash equivalents ant the end of period | 22,577 | 34,982 |
| SUPPLIMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
| Income taxes paid (refund received) | (2,721) | 2,546 |
| Interest paid on capital leases | $29 | $13 |
ORGANIZATION AND SUMMARY OF SIG
| ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [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 products, and weight-management products that are primarily sold to independent associates and members located in the United States, Canada, Australia, the United Kingdom, Japan, New Zealand, the Republic of Korea, Taiwan, Denmark, Germany, South Africa, Singapore, Austria, the Netherlands, Norway, and Sweden. Independent associates (associates) purchase the Companys products at published wholesale prices to either sell to retail customers or consume personally. Members purchase the Companys products at a discount from published retail prices primarily for personal consumption. The Company cannot distinguish personal consumption sales from other sales because it has no involvement in its products after delivery, other than customary product warranties and returns. Only independent associates are eligible to earn commissions and incentives. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the Companys consolidated financial statements and footnotes contained herein do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) to be considered complete financial statements. However, in the opinion of the Companys management, the accompanying unaudited consolidated financial statements and footnotes contain all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Companys consolidated financial information as of, and for, the periods presented. The Company cautions that its consolidated results of operations for an interim period are not necessarily indicative of its consolidated results of operations to be expected for its fiscal year. The December 31, 2008 consolidated balance sheet was included in the audited consolidated financial statements in the Companys annual report on Form 10-K for the year ended December 31, 2008 and filed with the United States Securities and Exchange Commission on March 12, 2009 (2008 Annual Report), which includes all disclosures required by GAAP. Therefore, these unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2008 Annual Report. 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 Companys consolidated fin |
| Organization | 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 products, and weight-management products that are primarily sold to independent associates and members located in the United States, Canada, Australia, the United Kingdom, Japan, New Zealand, the Republic of Korea, Taiwan, Denmark, Germany, South Africa, Singapore, Austria, the Netherlands, Norway, and Sweden. Independent associates (associates) purchase the Companys products at published wholesale prices to either sell to retail customers or consume personally. Members purchase the Companys products at a discount from published retail prices primarily for personal consumption. The Company cannot distinguish personal consumption sales from other sales because it has no involvement in its products after delivery, other than customary product warranties and returns. Only independent associates are eligible to earn commissions and incentives. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the Companys consolidated financial statements and footnotes contained herein do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) to be considered complete financial statements. However, in the opinion of the Companys management, the accompanying unaudited consolidated financial statements and footnotes contain all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Companys consolidated financial information as of, and for, the periods presented. The Company cautions that its consolidated results of operations for an interim period are not necessarily indicative of its consolidated results of operations to be expected for its fiscal year. The December 31, 2008 consolidated balance sheet was included in the audited consolidated financial statements in the Companys annual report on Form 10-K for the year ended December 31, 2008 and filed with the United States Securities and Exchange Commission on March 12, 2009 (2008 Annual Report), which includes all disclosures required by GAAP. Therefore, these unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2008 Annual Report. |
| Summary of Significant Accounting Policies | 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 Companys consolidated financial statements in accordance with GAAP 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 Companys estimates and the Company does not currently anticipate a significant change in its assumptions related to these estimates. 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 to be the most significant are described in this note to the consolidated financial statements,Organization and Summary of Significant Accounting Policies. 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 generally received within 24 to 72 hours. As of September 30, 2009 and December 31, 2008, credit card receivables were $3.8 million and $3.3 million, respectively. Additionally, as of September 30, 2009 and December 31, 2008, cash and cash equivalents held in bank accounts in foreign countries totaled $11.8 million and $18.2 million, respectively. 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 North America, and (iii) Australia building lease collateral. As of September 30, 2009 and December 31, 2008, our total restricted cash was $9.4 million. 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 September 30, 2009 and December 31, 2008, 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 September 30, 2009 and December 31, 2008, the Company held an allowance for doubtful accounts of less than $0.1 million. Inventories Inventories consist of raw materials, work in progress, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or market. The Co |
INVENTORIES
| INVENTORIES | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Inventories | NOTE 2: INVENTORIES Inventories consist of raw materials, work in progress, and finished goods, including promotional materials. Work in progress includes raw materials shipped to a third-party manufacturer to process into certain finished goods. The Company provides an allowance for any slow-moving or obsolete inventories. Inventories at September 30, 2009 and December 31, 2008, consisted of the following: September 30, 2009 December 31, 2008 (in thousands) Raw materials $ 10,830 $ 13,715 Finished goods 19,641 18,275 Inventory reserves for obsolescence (1,044 ) (677 ) $ 29,427 $ 31,313 |
INCOME TAXES
| INCOME TAXES | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Income Taxes | NOTE 3: INCOME TAXES For the three months and nine months ended September 30, 2009, the Companys effective tax rate was 20.0% and 19.7%, respectively. For the three months and nine months ended September 30, 2008, the Companys effective tax rate was 39.5% and 35.0%, respectively. The decrease for the three and nine months ended September 30, 2009 as compared to the same periods in 2008 was primarily due to additions to the valuation allowance for deferred tax assets in response to continued operating losses and the uncertainty associated with forecasting future operating results in the current economic environment. |
LOSS PER SHARE
| LOSS PER SHARE | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Loss Per Share | NOTE 4: LOSS PER SHARE Basic Earnings (Loss) Per Share (EPS) calculations are based on the weighted-average number of the Companys common shares outstanding during the period. Diluted EPS calculations are based on the calculated weighted-average number of common shares and dilutive common share equivalents outstanding during each period. The following data shows the amounts used in computing the Companys EPS and their effect on the Companys weighted-average number of common shares and dilutive common share equivalents for the three months ended September 30, 2009 and 2008. For the three months ended September 30, 2009, approximately 1.6 million shares of the Companys common stock subject to options were excluded from diluted EPS calculations using an average close price of $3.73 per share, as their effect was antidilutive. For the three months ended September 30, 2008, 1.5 million shares of the Companys common stock subject to options were excluded from diluted EPS calculations using an average close price of $5.20 per share, as their effect was antidilutive. The amounts below are rounded to the nearest thousands, except for per share amounts. For the three months ended September 30, 2009 2008 Loss (numerator) Shares (denominator) Per share amount Loss (numerator) Shares (denominator) Per share amount Basic EPS: Net loss available to common shareholders $ (9,207 ) 26,464 $ (0.35 ) $ (429 ) 26,461 $ (0.02 ) Effect of dilutive securities: Stock options Diluted EPS: Net loss available to common shareholders plus assumed conversions $ (9,207 ) 26,464 $ (0.35 ) $ (429 ) 26,461 $ (0.02 ) The following data shows the amounts used in computing the Companys EPS and their effect on the Companys weighted-average number of common shares and dilutive common share equivalents for the nine months ended September30, 2009 and 2008. For the nine months ended September 30, 2009, approximately 1.5 million shares of the Companys common stock subject to options were excluded from diluted EPS calculations using an average close price of $3.48 per share, as their effect was antidilutive. For the nine months ended September 30, 2008, approximately 1.4 million shares of the Companys common stock subject to options were excluded from diluted EPS calculations using an average close price of $6.11 per share, as their effect was antidilutive. The amounts below are rounded to the nearest thousands, except for per share amounts. For the nine months ended September 30, 2009 2008 Loss (numerator) Shares (denominator) Per share amount Loss (numerator) Shares (denominator) Per share amount Basic EPS: Net loss available to common shareholders $ (19,519 ) 26,462 $ (0.74 ) $ (13,248 ) 26,461 $ (0.50 ) Effect of dilutive securities: Stock options Diluted EPS: |
STOCK BASED COMPENSATION
| STOCK BASED COMPENSATION | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Stock-Based Compensation | NOTE 5: STOCK-BASED COMPENSATION The Company currently has one active stock-based compensation plan, which was approved by shareholders. The Company generally grants stock options to employees, consultants, and board members at the fair market value of its common stock, on the date of grant, with a term no greater than ten years. The stock options generally vest over two or three years. Incentive stock options granted to shareholders owning 10% or more of the Companys outstanding stock have an exercise price which may not be less than 110% of the fair market value of the Companys common stock on the date of the grant and a term no greater than five years. In February 2008, the Companys Board of Directors approved the Mannatech, Incorporated 2008 Stock Incentive Plan (the 2008 Plan) which reserved, for issuance of stock options and restricted stock to employees, board members, and consultants, up to 1,000,000 shares of common stock plus any shares reserved under the Companys then-existing, unexpired stock plan for which options had not yet been issued plus any shares underlying outstanding options under the then-existing stock option plan that terminate without having been exercised in full. The 2008 Plan was approved by the Companys shareholders at the 2008 Annual Shareholders Meeting held on June 18, 2008. As of September 30, 2009, the 2008 Plan had 390,507 stock options available for grant. The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses. During each of the three months ended September 30, 2009 and 2008, the Company granted 30,000 stock options. During the nine months ended September 30, 2009 and 2008, the Company granted 305,000 and 376,095 stock options, respectively. The fair values of stock options granted during the nine months ended September 30, 2009 ranged from $1.24 to $2.01 per share. The fair value of stock options granted during the nine months ended September 30, 2008 ranged from $1.85 to $2.81 per share. The Company recognized compensation expense as follows for the periods ended September 30: Three months Nine months 2009 2008 2009 2008 (in thousands) (in thousands) Total gross compensation expense $ 125 $ 163 $ 437 $ 576 Total tax benefit associated with compensation expense 24 31 97 116 Total net compensation expense $ 101 $ 132 $ 340 $ 460 As of September 30, 2009, the Company expects to record compensation expense in the future as follows: Three months ending Year ending December 31, December 31, 2009 2010 2011 2012 Total gross unrecognized compensation expense $ 109 $ 342 $ 191 $ 23 Tax benefit associated with unrecognized compensation expense 19 63 35 1 Total net unrecognized compensation expense $ 90 $ 279 $ 156 $ 22 |
LITIGATION
| LITIGATION | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Litigation | NOTE 6: LITIGATION Patent Infringement Litigation Mannatech, Inc. v. K.Y.C. Inc. d/b/a Techmedica Health Inc., Triton Nutra, Inc., Ionx Holdings, Inc., and John Does 1-30, Case No. 3-06-CV-0471-BD (N.D. Tex.) The Company filed a patent infringement lawsuit against K.Y.C. Inc. d/b/a Techmedica Health, Inc. (Techmedica), Triton Nutra, Inc., Ionx Holdings, Inc. (Ionx), and John Does 1-30, pending in the United States District Court of the Northern District of Texas, Dallas Division. The lawsuit alleges the defendants infringed United States Patent Nos. 6,929,807, 7,157,431, 7,196,064, 7,199,104, and 7,202,220, all entitled Compositions of Plant Carbohydrates as Dietary Supplements, and seeks to stop the manufacture, offer, and sale of defendants infringing glyconutritional products, as well as cessation of defendants false advertising about our products, including Ambrotose. On May 5, 2006, the Company initiated the lawsuit against Techmedica, alleging infringement of the 807 Patent. After Techmedica claimed that Triton Nutra manufactured its glyconutritional products, the Company amended its complaint on February 6, 2007 to add Triton Nutra as a defendant, as well as infringement claims related to the newly issued 431 Patent against both Techmedica and Triton Nutra. When Triton Nutra failed to answer the Amended Complaint, the Company requested, and the Clerk of Court entered, default against Triton Nutra on May 3, 2007. On August 10, 2007, the Court stayed the case pending entry of judgment in the Companys earlier patent infringement suit against Glycoproducts International, Inc. f/k/a Glycobiotics International, Inc. (Glycobiotics). During the stay, on February 28, 2008, a federal grand jury indicted Techmedica Health and its president for violations of federal drug distribution laws, wire and mail fraud, and money laundering. The government is seeking any property derived from these activities, including over $17 million in cash and various real estate and other property. After the indictment, Ionx purchased all of the assets of Techmedica, including its inventory of glyconutritional products, and began selling these products on the internet under the assumed name Micronutra Health. Following the Companys successful prosecution of its patent infringement suit against Glycobiotics, on July 30, 2008, the Court granted its unopposed motion to lift the stay in this suit. The Company filed its Second Amended Complaint on September 18, 2008, adding Ionx and John Does 1-30 as defendants and infringement claims related to the 064, 104, and 220 Patents, and naming Activive as an additional infringing glyconutritional product. In the Companys preliminary infringement contentions, it identified nine infringing products: Nutratose, Activive, Candidol, Claritose, Lupazol, Respitrol, Rhumatol, Synaptol, and Viratrol. In its deposition on October 10, 2008, Techmedicas corporate representative testified that all nine identified products are comprised of the same encapsulated ingredients.On October 13, 2008, Techmedica and Ionx filed identical answers and counterclaims, which claim that the Companys patents-in-suit are invalid, unenforce |
RECENT ACCOUNTING PRONOUNCEMENT
| RECENT ACCOUNTING PRONOUNCEMENTS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Recent Accounting Pronouncements | NOTE 7: RECENT ACCOUNTING PRONOUNCEMENTS In June2009, the Financial Accounting Standards Board (FASB) approved the FASB Accounting Standards Codification (Codification, FASB ASC) as the single source of authoritative generally accepted accounting principles (GAAP) and created a new Topic 105, Generally Accepted Accounting Principles, in the General Principles and Objective Section of the Codification. Topic 105 is effective for interim and annual periods ending after September15, 2009, and its adoption did not have an impact on our financial condition or results of operations. FASB ASC Topic 855, Subsequent Events establishes general standards of accounting for disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued. The adoption of Topic 855 did not have a material impact on the Companys consolidated financial statements and disclosures. In response to the current credit crisis, FASB updated three ASC Topics to address fair value measurement concerns as follows: FASB ASC Topic 820, Fair Value Measurements and Disclosures, provides additional guidance on measuring the fair value of financial instruments when market activity has decreased and quoted prices may reflect distressed transactions; FASB ASC Topic 320, Investments Debt and Equity Securities, amends the other-than-temporary impairment guidance for debt securities; and FASB ASC Topic 825, Financial Instruments, expands the fair value disclosures required for financial instruments to interim reporting periods for publicly traded companies, including disclosure of the significant assumptions used to estimate the fair value of those financial instruments. The adoption of the above mentioned amendments to the FASB ASC did not have a material impact on our financial condition, results of operations, and disclosures. In January2009, the Securities and Exchange Commission issued Release No.33-9002, Interactive Data to Improve Financial Reporting. The final rule requires companies to provide their financial statements and financial statement schedules to the Securities and Exchange Commission in interactive data format using the eXtensible Business Reporting Language (XBRL). The rule was adopted by the Securities and Exchange Commission to improve the ability of financial statement users to access and analyze financial data. The Securities and Exchange Commission adopted a phase-in schedule indicating when registrants must furnish interactive data. Under this schedule, the Company will be required to submit filings with financial statement information using XBRL commencing with our June30, 2011 quarterly report on Form 10-Q. We are furnishing financial information in XBRL format starting with this quarterly report on Form 10-Q. As an earlier XBRL adopter, the Company may choose to discontinue furnishing XBRL data in the future until the required compliance date of June 30, 2011. |
FAIR VALUE
| FAIR VALUE | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Fair Value | NOTE 8: 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 and Disclosure Topic of the FASB ASC 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 1Quoted unadjusted prices for identical instruments in active markets. Level 2Quoted 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 3Model-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 Companys 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 table below presents the recorded amount of financial assets measured at fair value on a recurring basis as of September 30, 2009. The Company does not have any material financial liabilities or nonfinancial assets and liabilities that were required to be measured at fair value on a recurring basis at September 30, 2009. Asset Level 1 Level 2 Level 3 Total Money Market Funds Fidelity, US $ 6,264 $ $ $ 6,264 Interest bearing deposits various banks, Korea 7,723 7,723 Total assets $ 13,987 $ $ $ 13,987 Amounts included in: Cash and cash equivalents $ 7,833 $ $ $ 7,833 Long-term restricted cash 6,154 6,154 Total $ 13,987 $ $ $ 13,987 |
SEGMENT INFORMATION
| SEGMENT INFORMATION | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Segment Information | NOTE 9: SEGMENT INFORMATION The Company conducts its business as one operating segment, consolidating all of its business units into a single reportable entity, as a seller of proprietary nutritional supplements, topical and skin care products, and weight-management products through its network-marketing distribution channels operating in sixteen countries. Each of the Companys 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 Companys 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 and distributes its products through similar distribution channels in each country. No single independent associate has ever accounted for more than 10% of the Companys consolidated net sales. The Company operates in eight physical locations and sells product in sixteen different countries around the world. The eight physical locations are the United States, Canada, Switzerland, Australia, the United Kingdom, Japan, the Republic of Korea (South Korea), and Taiwan. Each of the Companys physical locations services different geographic areas. The United States location processes orders for the United States and Canada. The Canadian location provides administrative support to the Canadian market and acts as a meeting location for independent associates. The Australian location processes orders for Australia, New Zealand, and Singapore. The Companys United Kingdom location processes orders for the United Kingdom, Denmark, Germany, Austria, the Netherlands, Norway, and Sweden. The Companys Switzerland office manages certain day-to-day business needs of non-North American markets and coordinates the Companys continued global expansion. Consolidated net sales shipped to customers in these locations, along with pack and product information for the three and nine months ended September 30, 2009 and 2008 are as follows (in millions, except percentages): Three months Nine months Country 2009 2008 2009 2008 United States $ 34.0 47.7 % $ 40.0 51.3 % $ 109.7 49.9 % $ 137.3 53.6 % Japan 9.9 13.9 % 10.8 13.8 % 31.4 14.3 % 33.9 13.3 % Republic of Korea 6.9 9.7 % 8.4 10.8 % 19.2 8.8 % 27.4 10.7 % Canada 5.8 8.1 % 5.7 7.3 % 17.5 8.0 % 17.8 6.9 % Australia 5.7 8.0 % 6.4 8.2 % 16.7 7.6 % 20.8 8.1 % South Africa(1) 3.9 5.5 % 2.0 2.6 % 9.4 4.2 % 3.4 1.3 % Taiwan 1.4 2.0 % 1.2 1.5 % 4.8 2.2 % 3.7 1.4 % New Zealand 1.1 1.5 % 1.2 1.5 % 3.3 1.5 % 4.2 1.6 % Germany 0.9 1.3 % 0.8 1.0 % 2.6 1.2 % |
SUBSEQUENT EVENTS
| SUBSEQUENT EVENTS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes To Financial Statements [Abstract] | |
| Subsequent Events | NOTE 10: SUBSEQUENT EVENTS As required by the Subsequent Events Topic of the FASB ASC, the Company evaluated all events or transactions that occurred after September30, 2009 up through November5, 2009, the date the Company issued these financial statements. During this period the Company did not have any material recognizable subsequent events. |
Document Information
| Document Information | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Document Information [Line Items] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Document Period End Date | 2009-09-30 |
Entity Information
| Entity Information (USD $) | |||
| 9 Months Ended
Sep. 30, 2009 | Oct. 30, 2009
| Jun. 30, 2009
| |
| Entity Information [Line Items] | |||
| 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 | Accelerated Filer | ||
| Entity Public Float | $85,313,436 | ||
| Entity Common Stock, Shares Outstanding | 26,480,788 |