Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Entity Information [Line Items] | ||
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | MANNATECH, INCORPORATED | |
Entity Central Index Key | 0001056358 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 1,860,154 | |
Entity Address, Postal Zip Code | 75028 | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 75-2508900 | |
Entity Address, Address Line One | 1410 Lakeside Parkway, Suite 200, | |
Entity Address, State or Province | TX | |
Entity Address, City or Town | Flower Mound, | |
City Area Code | (972) | |
Local Phone Number | 471-7400 | |
Entity File Number | 000-24657 | |
Title of 12(b) Security | Common Stock, | |
Trading Symbol | MTEX | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 7,928 | $ 13,777 |
Restricted cash | 938 | 944 |
Accounts receivable, net of allowance of $1,315 and $973 in 2023 and 2022, respectively | 149 | 218 |
Income tax receivable | 418 | 423 |
Inventories, net | 15,332 | 14,726 |
Prepaid expenses and other current assets | 2,040 | 2,389 |
Deferred commissions | 1,779 | 2,476 |
Total current assets | 28,584 | 34,953 |
Property and equipment, net | 4,326 | 3,759 |
Long-term restricted cash | 821 | 476 |
Other assets | 7,277 | 8,439 |
Deferred tax assets, net | 1,198 | 1,501 |
Total assets | 42,206 | 49,128 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Current portion of finance leases | 272 | 61 |
Accounts payable | 3,879 | 4,361 |
Accrued expenses | 7,547 | 7,510 |
Commissions and incentives payable | 9,051 | 9,256 |
Taxes payable | 1,311 | 3,281 |
Current notes payable | 303 | 263 |
Deferred revenue | 3,949 | 5,106 |
Total current liabilities | 26,312 | 29,838 |
Finance leases, excluding current portion | 1,022 | 88 |
Other long-term liabilities | 4,172 | 5,026 |
Total liabilities | 31,506 | 34,952 |
Commitments and contingencies | ||
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, 2,742,857 shares issued and 1,860,154 shares outstanding as of September 30, 2023 and 2,742,857 shares issued and 1,858,800 shares outstanding as of December 31, 2022 | 0 | 0 |
Additional paid-in capital | 33,301 | 33,377 |
Retained earnings | 455 | 1,686 |
Accumulated other comprehensive (loss) | (2,547) | (208) |
Treasury stock, at average cost, 882,703 shares as of September 30, 2023 and 884,057 shares as of December 31, 2022 | (20,509) | (20,679) |
Total shareholders’ equity | 10,700 | 14,176 |
Total liabilities and shareholders’ equity | $ 42,206 | $ 49,128 |
CONSOLIDATED BALANCE SHEETS - (
CONSOLIDATED BALANCE SHEETS - (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Accounts receivable, allowance for doubtful accounts | $ 1,315 | $ 973 |
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) | 2,742,857 | 2,742,857 |
Common stock, shares outstanding (in shares) | 1,860,154 | 1,858,800 |
Treasury Stock, Common, Shares | 882,703 | 884,057 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 32,553 | $ 35,513 | $ 99,261 | $ 102,873 |
Cost of sales | 6,625 | 7,416 | 21,042 | 22,427 |
Gross profit | 25,928 | 28,097 | 78,219 | 80,446 |
Operating expenses: | ||||
Commissions and incentives | 13,178 | 14,242 | 40,200 | 41,487 |
Selling and administrative expenses | 6,946 | 6,656 | 20,619 | 20,479 |
Depreciation and amortization expense | 450 | 716 | 1,224 | 1,349 |
Other operating costs | 5,182 | 5,126 | 16,245 | 14,886 |
Total operating expenses | 25,756 | 26,740 | 78,288 | 78,201 |
Income (loss) from operations | 172 | 1,357 | (69) | 2,245 |
Interest (expense) income, net | (17) | 19 | (3) | 57 |
Other income, net | 320 | 287 | 803 | 288 |
Income before income taxes | 475 | 1,663 | 731 | 2,590 |
Income tax provision | (457) | (472) | (1,214) | (571) |
Net income (loss) | $ 18 | $ 1,191 | $ (483) | $ 2,019 |
Income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.01 | $ 0.62 | $ (0.26) | $ 1.05 |
Diluted (in dollars per share) | $ 0.01 | $ 0.61 | $ (0.26) | $ 1.01 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 1,863 | 1,906 | 1,868 | 1,932 |
Diluted (in shares) | 1,863 | 1,949 | 1,868 | 2,017 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 18 | $ 1,191 | $ (483) | $ 2,019 |
Foreign currency translations | (889) | (2,561) | (2,339) | (5,395) |
Comprehensive loss | $ (871) | $ (1,370) | $ (2,822) | $ (3,376) |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - (UNAUDITED) - USD ($) $ in Thousands | Total | Common stock Par value | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive loss | Treasury Stock, Common |
45016 at Dec. 31, 2021 | $ 24,412 | $ 0 | $ 33,277 | $ 7,708 | $ 2,342 | $ (18,915) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 134 | 134 | ||||
Payment of cash dividends | (390) | (390) | ||||
Charge related to stock-based compensation | 7 | 7 | ||||
Issuance of unrestricted shares | 240 | 97 | 143 | |||
Foreign currency translations | (673) | (673) | ||||
45199 at Mar. 31, 2022 | 23,730 | 0 | 33,359 | 7,452 | 1,669 | (18,750) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Income Taxes Paid | 22 | (22) | ||||
45016 at Dec. 31, 2021 | 24,412 | 0 | 33,277 | 7,708 | 2,342 | (18,915) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 2,019 | |||||
Foreign currency translations | (5,395) | |||||
45199 at Sep. 30, 2022 | 18,611 | 0 | 33,418 | 8,567 | (3,053) | (20,321) |
45016 at Mar. 31, 2022 | 23,730 | 0 | 33,359 | 7,452 | 1,669 | (18,750) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 694 | 694 | ||||
Payment of cash dividends | (390) | (390) | ||||
Charge related to stock-based compensation | 48 | 48 | ||||
Repurchase of common stock | (643) | (643) | ||||
Foreign currency translations | (2,161) | (2,161) | ||||
45199 at Jun. 30, 2022 | 21,278 | 0 | 33,407 | 7,756 | (492) | (19,393) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 1,191 | 1,191 | ||||
Payment of cash dividends | (380) | (380) | ||||
Charge related to stock-based compensation | 11 | 11 | ||||
Repurchase of common stock | (928) | (928) | ||||
Foreign currency translations | (2,561) | (2,561) | ||||
45199 at Sep. 30, 2022 | 18,611 | 0 | 33,418 | 8,567 | (3,053) | (20,321) |
45016 at Dec. 31, 2022 | 14,176 | 0 | 33,377 | 1,686 | (208) | (20,679) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 604 | 604 | ||||
Payment of cash dividends | (375) | (375) | ||||
Charge related to stock-based compensation | 11 | 11 | ||||
Issuance of unrestricted shares | 223 | (76) | 299 | |||
Foreign currency translations | (799) | (799) | ||||
45199 at Mar. 31, 2023 | 13,852 | 0 | 33,277 | 1,915 | (1,007) | (20,333) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Income Taxes Paid | (12) | 35 | (47) | |||
45016 at Dec. 31, 2022 | 14,176 | 0 | 33,377 | 1,686 | (208) | (20,679) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (483) | |||||
Foreign currency translations | (2,339) | |||||
45199 at Sep. 30, 2023 | 10,700 | 0 | 33,301 | 455 | (2,547) | (20,509) |
45016 at Mar. 31, 2023 | 13,852 | 0 | 33,277 | 1,915 | (1,007) | (20,333) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (1,105) | (1,105) | ||||
Payment of cash dividends | (373) | (373) | ||||
Charge related to stock-based compensation | 17 | 17 | ||||
Repurchase of common stock | (98) | (98) | ||||
Foreign currency translations | (651) | (651) | ||||
45199 at Jun. 30, 2023 | 11,642 | 0 | 33,294 | 437 | (1,658) | (20,431) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 18 | 18 | ||||
Charge related to stock-based compensation | 7 | 7 | ||||
Repurchase of common stock | (78) | (78) | ||||
Foreign currency translations | (889) | (889) | ||||
45199 at Sep. 30, 2023 | $ 10,700 | $ 0 | $ 33,301 | $ 455 | $ (2,547) | $ (20,509) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (483) | $ 2,019 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,224 | 1,349 |
Operating Right Of Use Lease Liabilities Net | 1,232 | 1,550 |
Provision for inventory losses | 279 | 465 |
Provision for (reversal of) allowance for credit losses | 345 | (132) |
Gain (Loss) on Disposition of Assets | (7) | 3 |
Charge related to stock-based compensation | 259 | 306 |
Deferred income taxes | 303 | (145) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (276) | (48) |
Income tax receivable | 5 | (26) |
Inventories | (885) | (3,696) |
Prepaid expenses and other current assets | 946 | 1,583 |
Deferred commissions | 697 | (205) |
Deferred Freight | (213) | (656) |
Other assets | (482) | 612 |
Accounts payable | (247) | (3,459) |
Increase (Decrease) in Other Operating Liabilities | (854) | 3 |
Taxes payable | (1,970) | (246) |
Commissions and incentives payable | (205) | (1,209) |
Deferred revenue | (1,157) | 1,085 |
Net cash (used in) provided by operating activities | (1,049) | 459 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (540) | (889) |
Proceeds from Sale of Productive Assets | 1 | 0 |
Net cash used in investing activities | (539) | (889) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of common stock | (176) | (1,571) |
Payment of cash dividends | (748) | (1,160) |
Repayment of finance lease obligations and other long-term liabilities | (717) | (583) |
Net cash used in financing activities | (1,629) | (3,314) |
Effect of currency exchange rate changes on cash and cash equivalents | (2,293) | (5,417) |
Net decrease in cash, cash equivalents, and restricted cash | (5,510) | (9,161) |
Cash, cash equivalents, and restricted cash at the beginning of the period | 15,197 | 25,632 |
Cash, cash equivalents, and restricted cash at the end of the period | 9,687 | 16,471 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 284 | 1,739 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 1,305 | 92 |
Interest Paid, Excluding Capitalized Interest, Operating Activities | 72 | 24 |
Income Taxes Paid, Net | 2,511 | 690 |
Capital Expenditures Incurred but Not yet Paid | 597 | 638 |
Treasury shares exchanged for stock options exercised | 0 | 22 |
Proceeds from Stock Options Exercised | $ 12 | $ 0 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mannatech, Incorporated (together with its subsidiaries, the “Company”), located in Flower Mound, 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) the Americas (the United States, Canada 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, Hong Kong, and China). Active business building associates ("independent associates" or "associates" or "distributors") and preferred customers purchase the Company’s products at published wholesale prices. The Company cannot distinguish products sold for personal use from other sales when sold to associates, because it is not involved with the products after delivery, other than usual and customary product warranties and returns. Only associates are eligible to earn commissions and incentives. We also ship our products to customers in the following countries: Belgium, France, Greece, Italy, Luxembourg, and Poland. The Company operates a non-direct selling business in mainland China. Our subsidiary in China, Meitai Daily Necessity & Health Products Co., Ltd. (“Meitai”), is operating as a traditional retailer under a cross-border e-commerce model in China. Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with instructions for Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the Company’s consolidated financial statements and footnotes contained herein do not include all of the information and footnotes required by GAAP to be considered “complete financial statements”. However, in the opinion of the Company’s management, the accompanying unaudited consolidated financial statements and footnotes contain all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Company’s 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, 2022 consolidated balance sheet was included in the audited consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2022 and filed with the United States Securities and Exchange Commission (the “SEC”) on March 17, 2023 (the “2022 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 2022 Annual Report. Principles of Consolidation The consolidated financial statements and footnotes include the accounts of Mannatech 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 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 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 . Cash, Cash Equivalents, and Restricted Cash 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. At each of September 30, 2023 and December 31, 2022, credit card receivables were $1.9 million. As of September 30, 2023 and December 31, 2022, cash and cash equivalents held in bank accounts in foreign countries totaled $3.8 million and $11.3 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest-bearing deposits. The Company holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk. A significant portion of our cash and cash equivalent balances were concentrated within the Republic of Korea, with total net assets within this foreign location totaling $26.2 million and $21.3 million at September 30, 2023 and December 31, 2022, respectively. In addition, for the three and nine months ended September 30, 2023 and 2022, a concentrated portion of our operating cash flows were earned from operations within the Republic of Korea. An adverse change in economic conditions within the Republic of Korea could negatively affect the Company’s results of operations. 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) the Australia building lease collateral. At September 30, 2023 and December 31, 2022, our total restricted cash was $1.8 million and $1.4 million, respectively. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's consolidated balance sheets to the total amount presented in the consolidated statement of cash flows (in thousands) : September 30, 2023 December 31, 2022 Cash and cash equivalents at beginning of period $ 13,777 $ 24,185 Current restricted cash at beginning of period 944 944 Long-term restricted cash at beginning of period 476 503 Cash, cash equivalents, and restricted cash at beginning of period $ 15,197 $ 25,632 Cash and cash equivalents at end of period $ 7,928 $ 13,777 Current restricted cash at end of period 938 944 Long-term restricted cash at end of period 821 476 Cash, cash equivalents, and restricted cash at end of period $ 9,687 $ 15,197 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, 2023 and December 31, 2022, receivables consisted primarily of amounts due from preferred customers and associates. At September 30, 2023 and December 31, 2022, the Company's accounts receivable balances (net of allowance) were $0.1 million and $0.2 million, respectively. Upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), the Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. Expected loss estimates are determined utilizing an aging schedule. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. At September 30, 2023 and December 31, 2022, the Company held an allowance for credit losses of $1.3 million and $1.0 million, respectively. December 31, 2022 Charged to Cost and Expenses Deductions September 30, 2023 Allowance for credit losses ( 000's) $ 973 $ 344 $ (2) $ 1,315 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 net realizable value. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. Other Assets As of September 30, 2023 and December 31, 2022, other assets were $7.3 million and $8.4 million, respectively. These amounts primarily consisted of right-of-use assets related to operating leases for office space and equipment, net of lease incentives, o f $3.7 million and $4.6 million as of September 30, 2023 and December 31, 2022, respectively. See Note 8, Leases, for more information on these assets. Also included in Other Assets were deposits for building leases in various locations of $1.3 million for each of September 30, 2023 and December 31, 2022 . Additionally, included in the September 30, 2023 and December 31, 2022 balances was $2.1 million and $2.3 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 to protect consumers who participate in network marketing activities. Finally, each of the September 30, 2023 and December 31, 2022 balances included $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. Accrued Expenses At each of September 30, 2023 and December 31, 2022, accrued expenses were $7.5 million. These amounts primarily consisted of $2.1 million and $1.4 million representing employee benefits, which included accrued wages, bonus and severance at September 30, 2023 and December 31, 2022, respectively. Also included in the September 30, 2023 and December 31, 2022 balances were non-inventory accrued liabilities of $1.7 million and $2.8 million, respectively. Additionally, included in the September 30, 2023 and December 31, 2022 balances were $1.7 million and $1.6 million for the current portion of operating lease liabilities, respectively. At September 30, 2023 and December 31, 2022, also included in the balances were $0.8 million and $1.0 million for accrued auditing and accounting fees, respectively. As of September 30, 2023 and December 31, 2022, other accrued expenses were $1.2 million and $0.7 million, respectively. Notes Payable Notes payable were $0.3 million at each of September 30, 2023 and December 31, 2022, as a result of short-term financing arrangements for insurance policies. At each of September 30, 2023 and December 31, 2022, the current portion were $0.3 million. There was no long-term portion at either period. Other Long-Term Liabilities Other long-term liabilities were $4.2 million and $5.0 million as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the balance is primarily composed of long-term operating lease obligations of $3.0 million and $4.2 million, respectively. See Note 8, Leases, for more information. 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 September 30, 2023 and December 31, 2022, accrued restoration costs related to these leases amounted to $0.3 million. At each of September 30, 2023 and December 31, 2022, the Company also recorded a long-term liability for estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations of $0.2 million (see Note 9, Employee Benefit Plans , of the Company’s 2022 Annual Report). Revenue Recognition The Company’s revenue is derived from sales of individual products and associate fees or, in certain geographic markets, starter packs. Substantially all of the Company’s product sales are made at published wholesale prices to associates and preferred customers. 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 products when control of the product transfers to the customer, thus the performance obligation is satisfied. Corporate-sponsored event revenue is recognized when the event is held. Revenues from associate fees relate to providing associates with the right to earn commissions, benefits and incentives for an annual period. Revenue from software tools included in the first contractual year is recognized over three twelve Contracts with Multiple Performance Obligations for recognition guidelines). Almost all orders are paid via credit card. See Note 10, Segment Information, for disaggregation of revenues by geographic segment and type. The Company collected associate fees within the United States, Canada, South Africa, Japan, Australia, New Zealand, Singapore, Hong Kong, Taiwan, Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, the Netherlands, Norway, Spain, Sweden and the United Kingdom. Contracts with Multiple Performance Obligations Orders placed by associates or preferred customers constitute our contracts. Product sales placed in the form of an automatic order contain two performance obligations: (a) the sale of the product and (b) the loyalty program. For these contracts, the Company accounts for each of these obligations separately as they are each distinct. The transaction price is allocated between the product sale and the loyalty program on a relative standalone selling price basis. Sales placed through a one-time order contain only the first performance obligation noted above, the sale of the product. The Company provides associates with access to a complimentary three-month package for the Success Tracker TM and Mannatech+ online business tools with the first payment of an associate fee. The first payment of an associate fee contains three performance obligations: (a) the associate fee, whereby the Company provides an associate with the right to earn commissions, bonuses and incentives for a year; (b) three months of complimentary access to utilize the Success Tracker™ online tool; and (c) three months of complimentary access to utilize the Mannatech+ online business tool. The transaction price is allocated between the three performance obligations on a relative standalone selling price basis. Associates do not have complimentary access to online business tools after the first contractual period. Deferred Commissions The Company defers commissions on (i) the sales of products shipped but not received by customers by the end of the respective period and (ii) the loyalty program. Deferred commissions are incremental costs and are amortized to expense consistent with how the related revenue is recognized. Deferred commissions were $2.5 million for the year ended December 31, 2022. Of this balance, $0.8 million was amortized to commissions expense for the nine months ended September 30, 2023. At September 30, 2023, deferred commissions were $1.8 million. Deferred Revenue The Company defers certain components of its revenue. Deferred revenue consisted of: (i) sales of products shipped but not received by customers by the end of the respective period; (ii) revenue from the loyalty program; (iii) prepaid registration fees from customers planning to attend a future corporate-sponsored event; and (iv) prepaid annual associate fees. At December 31, 2022, the Company’s deferred revenue was $5.1 million. Of this balance, $1.8 million was recognized as revenue for the nine months ended September 30, 2023. At September 30, 2023, the Company’s deferred revenue was $3.9 million. The Company’s customer loyalty program conveys a material right to the customer as it provides the promise to redeem loyalty points for the purchase of products, which is based on earning points through placing consecutive qualified orders. The Company factors in breakage rates, which is the percentage of the loyalty points that are expected to be forfeited or expire, for purposes of revenue recognition. Breakage rates are estimated based on historical data and can be reasonably and objectively determined. During the preparation of our consolidated financial statements for the three-months ended June 30, 2023, an immaterial error was identified in the calculation of breakage relating to our loyalty program. To correct the error, we recognized an out of period adjustment resulting in an accumulated increase in revenues of $1.4 million for the nine months ended September 30, 2023. The out of period adjustment also resulted in an accumulated increase in commission expense of $0.5 million for the nine months ended September 30, 2023. The deferred revenue associated with the loyalty program at each of September 30, 2023 and December 31, 2022 was $2.9 million and $4.2 million, respectively. Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2022 $ 4,292 Loyalty points forfeited or expired (3,387) Loyalty points used (10,543) Loyalty points vested 12,773 Loyalty points unvested 1,032 Loyalty deferred revenue as of December 31, 2022 $ 4,167 Loyalty deferred revenue as of January 1, 2023 $ 4,167 Loyalty points forfeited or expired (3,176) Loyalty points used (6,846) Loyalty points vested 7,880 Loyalty points unvested 867 Loyalty deferred revenue as of September 30, 2023 $ 2,892 Sales Refunds and Allowances The Company utilizes the expected value method, as set forth by Accounting Standard Codification ("ASC") Topic 606 Revenue from Contracts with Customers ("ASC 606"), to estimate the sales returns and allowance liability by taking the weighted average of the sales return rates over a rolling six-month period. The Company allocates the total amount recorded within the sales return and allowance liability as a reduction of the overall transaction price for the Company’s product sales. The Company deems the sales refund and allowance liability to be a variable consideration. Historically, 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. As of each of the periods set forth below, our sales return reserve consisted of the following (in thousands): Sales reserve as of January 1, 2022 $ 55 Provision related to sales made in current period 783 Adjustment related to sales made in prior periods (4) Actual returns or credits related to current period (730) Actual returns or credits related to prior periods (45) Sales reserve as of December 31, 2022 $ 59 Sales reserve as of January 1, 2023 $ 59 Provision related to sales made in current period 562 Adjustment related to sales made in prior periods 219 Actual returns or credits related to current period (520) Actual returns or credits related to prior periods (271) Sales reserve as of September 30, 2023 $ 49 Shipping and Handling Costs The Company records inbound freight as a component of inventory and cost of sales. The Company records freight and shipping fees collected from its customers as fulfillment costs. In accordance with ASC 606-10-25-18a, freight and shipping fees are not deemed to be separate performance obligations as these activities occur before the customer receives the product. Commissions and Incentives Associates earn commissions and incentives based on their direct and indirect commissionable net sales over each month of the fiscal year. The Company accrues commissions and incentives when earned by associates and pays commissions on product and pack sales on a monthly cycle. Comprehensive Income and Accumulated Other Comprehensive Income Comprehensive income 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, Denmark, Norway, Sweden, Mexico and China operations, remeasurement of intercompany balances classified as equity in its Korea, and Mexico operations, and changes in the pension obligation for its Japanese employees. Recently Adopted Accounting Pronouncements The Company adopted ASU 2016-13 as of January 1, 2023. This new standard adds to U.S. GAAP an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the more timely recognition of losses. Under the CECL model, entities estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. ASU 2016-13 only applies to our receivables from revenue transactions. Under ASC 606, revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses on trade receivables over their contractual life are required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The Company adopted the accounting standard using the prospective transition approach as of January 1, 2023. The cumulative effect upon adoption did not have a material impact on our consolidated financial statements or existing internal controls. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 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 September 30, 2023 and December 31, 2022, consisted of the following (in thousands) : September 30, 2023 December 31, 2022 Raw materials $ 4,574 $ 3,302 Finished goods 11,144 11,841 Inventory reserves for obsolescence (386) (417) Total $ 15,332 $ 14,726 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three and nine months ended September 30, 2023, the Company’s effective tax rate was 43% and 166.1%, respectively. For the three and nine months ended September 30, 2022, the Company's effective tax rate was 28.4% and 22.0%, respectively. For the three and nine months ended September 30, 2023 and 2022, the Company's effective tax rate was determined based on the estimated annual effective income tax rate. The effective tax rate for the three and nine months ended September 30, 2023 was different from the federal statutory rate due to the mix of earnings across jurisdictions and the associated valuation allowances recorded on losses in certain jurisdictions. The effective tax rate for the three and nine months ended September 30, 2022 was different from the federal statutory rate due to the effect of changes in valuation allowances recorded in certain jurisdictions and the foreign derived intangible deduction in the US. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | 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. Diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards outstanding under the Mannatech, Incorporated 2017 Stock Incentive Plan (described below). In determining the potential dilutive effect of outstanding stock options f or the three and nine months ended September 30, 2023, the Company used the quarterly and nine-month average common stock close price of $11.90 and $14.11, respectively. For the three months ended September 30, 2023, there were 1.86 million weighted-average common shares outstanding used for the basic EPS calculation. For the three months ended September 30, 2023, approximately 0.2 million shares were excluded from the diluted EPS calculation as their effect would have been antidilutive. The Company reported a net loss for the nine months ended September 30, 2023. In determining the potential dilutive effect of outstanding stock options for the three and nine months ended September 30, 2022, the Company used the quarterly and nine-month average common stock close price of $20.10 and $27.58 per share, respectively. For the three and nine months ended September 30, 2022, there were 1.91 million and 1.93 million weighted-average common shares outstanding used for the basic EPS calculation, respectively. For the three and nine months ended September 30, 2022, approximately 0.04 million and 0.09 million shares, respectively, subject to options were included in the calculation resulting in 1.95 million and 2.02 million dilutive shares, respectively, used to calculate diluted EPS. For the three months ended September 30, 2022, less than 0.1 million shares were excluded from the diluted EPS calculation, as the effect would have been antidilutive. For the nine months ended September 30, 2022, approximately 0.1 million shares were excluded from the diluted EPS calculation, as the effect would have been antidilutive. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company currently has one active stock-based compensation plan, the Mannatech, Incorporated 2017 Stock Incentive Plan, which was adopted by the Company’s Board of Directors (the "Board") on April 17, 2017 and was approved by its shareholders on June 8, 2017, and subsequently amended by the Board at its February 2019 special meeting, which amendment was approved by the Company's shareholders on June 11, 2019 (as amended, the "2017 Plan"). The 2017 Plan supersedes the Mannatech, Incorporated 2008 Stock Incentive Plan (as amended, the "2008 Plan"), which was set to expire on February 20, 2018. The Board has reserved a maximum of 370,000 shares of our common stock that may be issued under the 2017 Plan (subject to adjustments for stock splits, stock dividends or other changes in corporate capitalization). As of September 30, 2023, the Company had a total of 108,468 shares available for grant under the 2017 Plan, which expires on April 16, 2027. The 2017 Plan provides for grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock and performance stock units to our employees, board members, and consultants. However, only employees of the Company and its corporate subsidiaries are eligible to receive incentive stock options. The exercise price per share for all stock options will be no less than the market value of a share of common stock on the date of grant. Any incentive stock option granted to an employee owning more than 10% of our common stock will have an exercise price of no less than 110% of our common stock’s market value on the grant date. The majority of stock options vest over two three ten five The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses. During the nine months ended September 30, 2023 and 2022, the Company granted 5,000 and 11,807 stock options, respectively. The fair value of stock options granted during the nine months ended September 30, 2023 and 2022 was approximately $4.32 and $7.21 per share, respectively. The Company recognized compensation expense as follows for the three and nine months ended September 30 (in thousands) : Three Months Ended Nine Months Ended 2023 2022 2023 2022 Total gross compensation expense $ 8 $ 11 $ 36 $ 66 Total tax benefit associated with compensation expense 2 2 8 15 Total net compensation expense $ 6 $ 9 $ 28 $ 51 As of September 30, 2023, the Company expects to record compensation expense in the future as follows (in thousands) : Three months Years ending December 31, 2024 2025 Total gross unrecognized compensation expense $ 8 $ 17 $ 3 Tax benefit associated with unrecognized compensation expense 2 4 1 Total net unrecognized compensation expense $ 6 $ 13 $ 2 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Treasury Stock During the three months ended September 30, 2023 and 2022, the Company repurchased 6,058 and 46,332 shares of its outstanding common stock, respectively. During the nine months ended September 30, 2023 and 2022, the Company repurchased 13,454 and 77,743 shares of its outstanding common stock, respectively. As of September 30, 2023 , the Company had 1,860,154 s hares of common stock outstanding. As of September 30, 2022, the Company had 1,874,930 shares of common stock outstanding. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, reflected in the Consolidated Statement of Shareholders’ Equity, represents net income plus the results of certain shareholders’ equity changes not reflected in the Consolidated Statements of Operations, such as foreign currency translation and certain pension and post-retirement benefit obligations. The after-tax components of accumulated other comprehensive loss are as follows (in thousands) : Foreign Pension Accumulated Balance as of December 31, 2022 $ (608) $ 400 $ (208) Current-period change (1) (2,339) — (2,339) Balance as of September 30, 2023 $ (2,947) $ 400 $ (2,547) (1) No material amounts reclassified from accumulated other comprehensive loss. Dividends On March 5, 2023, the Board declared a dividend of $0.20 per share that was paid on March 30, 2023 to shareholders of record on March 16, 2023, for an aggregate amount of $0.4 million. On May 25, 2023, the Board declared a dividend of $0.20 per share that was paid on June 29, 2023 to shareholders of record on June 15, 2023, for an aggregate amount of $0.4 million. |
LITIGATION
LITIGATION | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | LITIGATION 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. 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. No legal reserve was deemed necessary at September 30, 2023. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 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 820) of the Financial Accounting Standards Board (“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 Company does not have any material financial liabilities that were required to be measured at fair value on a recurring basis at September 30, 2023. The table below presents the recorded amount of financial assets measured at fair value (in thousands) on a recurring basis as of September 30, 2023 and December 31, 2022. September 30, 2023 Level 1 Level 2 Level 3 Total Assets Money Market Funds – JPMorgan Chase, US $ 1,701 $ — $ — $ 1,701 Interest bearing deposits – various banks $ 1,198 — — $ 1,198 Total assets $ 2,899 $ — $ — $ 2,899 Amounts included in: Cash and cash equivalents $ 1,701 $ — $ — $ 1,701 Restricted cash 674 — — 674 Long-term restricted cash 524 — — 524 Total $ 2,899 $ — $ — $ 2,899 December 31, 2022 Level 1 Level 2 Level 3 Total Assets Interest bearing deposits – various banks $ 3,855 — — $ 3,855 Total assets $ 3,855 $ — $ — $ 3,855 Amounts included in: Cash and cash equivalents $ 3,014 $ — $ — $ 3,014 Restricted cash 680 — — 680 Long-term restricted cash 161 — — 161 Total $ 3,855 $ — $ — $ 3,855 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company's sole reporting segment is one where we sell proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products through network marketing distribution channels operating in twenty-four countries. Each of the business units receives associate fees or sells similar packs (in the case of Mexico and South Korea, where packs have not been replaced with associate fees, see Note 1, Organization and Summary of Significant Accounting Policies ) 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 pack sales, associate fees 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 also operates a non-direct selling business in mainland China. Our subsidiary in China, Meitai, is operating as a traditional retailer under a cross-border e-commerce model. Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China. The Company has operations in twelve countries and sells product in twenty-five countries around the world. These operations are located in the United States, Canada, Australia, the Netherlands, the United Kingdom, Japan, the Republic of Korea (South Korea), Taiwan, South Africa, Mexico, Hong Kong and China. We currently sell our products in three regions: (i) the Americas (the United States, Canada 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, Hong Kong and China). We also ship our products to customers in the following countries: Belgium, France, Greece, Italy, Luxembourg, and Poland. Consolidated net sales shipped to customers in these regions, along with pack or associate fee and product information for the three and nine months ended September 30, were as follows (in millions, except percentages) : Three Months Ended Nine Months Ended Region 2023 2022 2023 2022 Americas $ 10.7 32.8 % $ 11.1 31.3 % $ 31.8 32.0 % $ 30.6 29.8 % Asia/Pacific 19.6 60.1 % 21.4 60.2 % 60.0 60.4 % 63.2 61.4 % EMEA 2.3 7.1 % 3.0 8.5 % 7.5 7.6 % 9.1 8.8 % Totals $ 32.6 100.0 % $ 35.5 100.0 % $ 99.3 100.0 % $ 102.9 100.0 % Three Months Ended Nine Months Ended 2023 2022 2023 2022 Consolidated product sales $ 31.0 $ 33.6 $ 93.9 $ 97.5 Consolidated pack sales and associate fees 1.2 1.7 4.7 4.8 Consolidated other 0.4 0.2 0.7 0.6 Consolidated total net sales $ 32.6 $ 35.5 $ 99.3 $ 102.9 Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of September 30, 2023 and December 31, 2022, reside in the following regions, as follows (in millions) : Region September 30, 2023 December 31, 2022 Americas $ 3.9 $ 3.2 Asia/Pacific 0.4 0.6 EMEA — — Total $ 4.3 $ 3.8 Inventory balances, which consist of raw materials, finished goods, and promotional materials, as offset by the allowance for slow moving or obsolete inventories, reside in the following regions (in millions) : Region September 30, 2023 December 31, 2022 Americas $ 8.1 $ 7.5 Asia/Pacific 5.5 5.4 EMEA 1.7 1.8 Total $ 15.3 $ 14.7 |
Leases (Notes)
Leases (Notes) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | LEASES The Company has entered into contractual lease arrangements to rent office space and equipment from third-party lessors. See Note 5 to the consolidated financial statements in our 2022 Annual Report. On March 10, 2023, the Company entered into a five-year agreement to sublease 10,000 rentable square feet of the Company's leased office space in Flower Mound, Texas to a subtenant. There was no modification or impairment by entering into the sublease agreement because the Company was not released from its obligations under the head lease. As of September 30, 2023, the Company had earned less than $0.1 million income from the sublease, which is presented as a component of net sales on the Company's Consolidated Statements of Operations. As of September 30, 2023, the Company had net operating lease right-of-use assets of $3.7 million and net finance lease right-of-use assets of $1.3 million. At September 30, 2023, our operating lease liabilities were $4.7 million and our finance lease liabilities were $1.3 million. The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of September 30, 2023 were 3.50 years and 4.6%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of September 30, 2023 were 4.42 years and 6.5%, respectively. The Company uses the discount rates implicit in each lease, or an estimate of the Company's incremental borrowing rate if the rate implicit in a lease cannot be readily determined. As of September 30, 2023 and December 31, 2022 our right-of-use assets and lease liabilities consisted of the following (in thousands): Leases Classification September 30, 2023 December 31, 2022 Right-of-use assets Operating leases Other assets $ 3,674 $ 4,649 Finance leases Property and equipment, net 1,311 182 Total right-of-use assets $ 4,985 $ 4,831 Current portion of lease liabilities Operating leases Accrued expenses $ 1,698 $ 1,600 Finance leases Current portion of finance leases 272 61 Long-term portion of lease liabilities Operating leases Other long-term liabilities 2,970 4,153 Finance leases Finance leases, excluding current portion 1,022 88 Total lease liabilities $ 5,962 $ 5,902 As of September 30, 2023, the Company's future sublease income and minimum future lease payments on operating and finance leases were as follows (in thousands): September 30, 2023 Future Maturities of Leases Operating Leases Finance Leases Sublease Income Remaining 2023 524 89 (33) 2024 1,795 337 (132) 2025 1,115 327 (132) 2026 719 327 (132) Thereafter 917 405 (187) Total minimum lease payments $ 5,070 $ 1,485 $ (616) Imputed interest (402) (191) — Present value of minimum lease payments $ 4,668 $ 1,294 $ (616) |
SUBSEQUENT EVENTS (Notes)
SUBSEQUENT EVENTS (Notes) | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements and footnotes include the accounts of Mannatech and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s 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 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 . |
Cash and Cash Equivalents | Cash, Cash Equivalents, and Restricted Cash 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. At each of September 30, 2023 and December 31, 2022, credit card receivables were $1.9 million. As of September 30, 2023 and December 31, 2022, cash and cash equivalents held in bank accounts in foreign countries totaled $3.8 million and $11.3 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest-bearing deposits. The Company 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) the Australia building lease collateral. At September 30, 2023 and December 31, 2022, our total restricted cash was $1.8 million and $1.4 million, respectively. |
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 September 30, 2023 and December 31, 2022, receivables consisted primarily of amounts due from preferred customers and associates. At September 30, 2023 and December 31, 2022, the Company's accounts receivable balances (net of allowance) were $0.1 million and $0.2 million, respectively. Upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), the Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. Expected loss estimates are determined utilizing an aging schedule. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. At September 30, 2023 and December 31, 2022, the Company held an allowance for credit losses of $1.3 million and $1.0 million, respectively. December 31, 2022 Charged to Cost and Expenses Deductions September 30, 2023 Allowance for credit losses ( 000's) $ 973 $ 344 $ (2) $ 1,315 |
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 net realizable value. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. |
Other Assets | Other Assets As of September 30, 2023 and December 31, 2022, other assets were $7.3 million and $8.4 million, respectively. These amounts primarily consisted of right-of-use assets related to operating leases for office space and equipment, net of lease incentives, o f $3.7 million and $4.6 million as of September 30, 2023 and December 31, 2022, respectively. See Note 8, Leases, for more information on these assets. Also included in Other Assets were deposits for building leases in various locations of $1.3 million for each of September 30, 2023 and December 31, 2022 . Additionally, included in the September 30, 2023 and December 31, 2022 balances was $2.1 million and $2.3 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 to protect consumers who participate in network marketing activities. Finally, each of the September 30, 2023 and December 31, 2022 balances included $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. |
Notes Payable | Notes Payable Notes payable were $0.3 million at each of September 30, 2023 and December 31, 2022, as a result of short-term financing arrangements for insurance policies. At each of September 30, 2023 and December 31, 2022, the current portion were $0.3 million. There was no long-term portion at either period. |
Revenue Recognition | Revenue Recognition The Company’s revenue is derived from sales of individual products and associate fees or, in certain geographic markets, starter packs. Substantially all of the Company’s product sales are made at published wholesale prices to associates and preferred customers. 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 products when control of the product transfers to the customer, thus the performance obligation is satisfied. Corporate-sponsored event revenue is recognized when the event is held. Revenues from associate fees relate to providing associates with the right to earn commissions, benefits and incentives for an annual period. Revenue from software tools included in the first contractual year is recognized over three twelve Contracts with Multiple Performance Obligations for recognition guidelines). Almost all orders are paid via credit card. See Note 10, Segment Information, for disaggregation of revenues by geographic segment and type. The Company collected associate fees within the United States, Canada, South Africa, Japan, Australia, New Zealand, Singapore, Hong Kong, Taiwan, Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, the Netherlands, Norway, Spain, Sweden and the United Kingdom. Contracts with Multiple Performance Obligations Orders placed by associates or preferred customers constitute our contracts. Product sales placed in the form of an automatic order contain two performance obligations: (a) the sale of the product and (b) the loyalty program. For these contracts, the Company accounts for each of these obligations separately as they are each distinct. The transaction price is allocated between the product sale and the loyalty program on a relative standalone selling price basis. Sales placed through a one-time order contain only the first performance obligation noted above, the sale of the product. The Company provides associates with access to a complimentary three-month package for the Success Tracker TM and Mannatech+ online business tools with the first payment of an associate fee. The first payment of an associate fee contains three performance obligations: (a) the associate fee, whereby the Company provides an associate with the right to earn commissions, bonuses and incentives for a year; (b) three months of complimentary access to utilize the Success Tracker™ online tool; and (c) three months of complimentary access to utilize the Mannatech+ online business tool. The transaction price is allocated between the three performance obligations on a relative standalone selling price basis. Associates do not have complimentary access to online business tools after the first contractual period. |
Commissions and Incentives | Commissions and Incentives Associates earn commissions and incentives based on their direct and indirect commissionable net sales over each month of the fiscal year. The Company accrues commissions and incentives when earned by associates and pays commissions on product and pack sales on a monthly cycle. |
Comprehensive Income and Accumulated Other Comprehensive Income | Comprehensive Income and Accumulated Other Comprehensive Income Comprehensive income 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, Denmark, Norway, Sweden, Mexico and China operations, remeasurement of intercompany balances classified as equity in its Korea, and Mexico operations, and changes in the pension obligation for its Japanese employees. |
Recently Adopted and Issued But Not Yet Effective Accounting Pronouncements | Recently Adopted Accounting PronouncementsThe Company adopted ASU 2016-13 as of January 1, 2023. This new standard adds to U.S. GAAP an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the more timely recognition of losses. Under the CECL model, entities estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. ASU 2016-13 only applies to our receivables from revenue transactions. Under ASC 606, revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses on trade receivables over their contractual life are required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The Company adopted the accounting standard using the prospective transition approach as of January 1, 2023. The cumulative effect upon adoption did not have a material impact on our consolidated financial statements or existing internal controls. |
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 820) of the Financial Accounting Standards Board (“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. |
Accrued Expenses | Accrued Expenses At each of September 30, 2023 and December 31, 2022, accrued expenses were $7.5 million. These amounts primarily consisted of $2.1 million and $1.4 million representing employee benefits, which included accrued wages, bonus and severance at September 30, 2023 and December 31, 2022, respectively. Also included in the September 30, 2023 and December 31, 2022 balances were non-inventory accrued liabilities of $1.7 million and $2.8 million, respectively. Additionally, included in the September 30, 2023 and December 31, 2022 balances were $1.7 million and $1.6 million |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reconciliation of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's consolidated balance sheets to the total amount presented in the consolidated statement of cash flows (in thousands) : September 30, 2023 December 31, 2022 Cash and cash equivalents at beginning of period $ 13,777 $ 24,185 Current restricted cash at beginning of period 944 944 Long-term restricted cash at beginning of period 476 503 Cash, cash equivalents, and restricted cash at beginning of period $ 15,197 $ 25,632 Cash and cash equivalents at end of period $ 7,928 $ 13,777 Current restricted cash at end of period 938 944 Long-term restricted cash at end of period 821 476 Cash, cash equivalents, and restricted cash at end of period $ 9,687 $ 15,197 |
Loyalty deferred revenue | The deferred revenue associated with the loyalty program at each of September 30, 2023 and December 31, 2022 was $2.9 million and $4.2 million, respectively. Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2022 $ 4,292 Loyalty points forfeited or expired (3,387) Loyalty points used (10,543) Loyalty points vested 12,773 Loyalty points unvested 1,032 Loyalty deferred revenue as of December 31, 2022 $ 4,167 Loyalty deferred revenue as of January 1, 2023 $ 4,167 Loyalty points forfeited or expired (3,176) Loyalty points used (6,846) Loyalty points vested 7,880 Loyalty points unvested 867 Loyalty deferred revenue as of September 30, 2023 $ 2,892 |
Sales return reserve | , our sales return reserve consisted of the following (in thousands): Sales reserve as of January 1, 2022 $ 55 Provision related to sales made in current period 783 Adjustment related to sales made in prior periods (4) Actual returns or credits related to current period (730) Actual returns or credits related to prior periods (45) Sales reserve as of December 31, 2022 $ 59 Sales reserve as of January 1, 2023 $ 59 Provision related to sales made in current period 562 Adjustment related to sales made in prior periods 219 Actual returns or credits related to current period (520) Actual returns or credits related to prior periods (271) Sales reserve as of September 30, 2023 $ 49 |
Other Noncurrent Liabilities | Other Long-Term Liabilities Other long-term liabilities were $4.2 million and $5.0 million as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the balance is primarily composed of long-term operating lease obligations of $3.0 million and $4.2 million, respectively. See Note 8, Leases, for more information. 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 September 30, 2023 and December 31, 2022, accrued restoration costs related to these leases amounted to $0.3 million. At each of September 30, 2023 and December 31, 2022, the Company also recorded a long-term liability for estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations of $0.2 million (see Note 9, Employee Benefit Plans |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories as of September 30, 2023 and December 31, 2022, consisted of the following (in thousands) : September 30, 2023 December 31, 2022 Raw materials $ 4,574 $ 3,302 Finished goods 11,144 11,841 Inventory reserves for obsolescence (386) (417) Total $ 15,332 $ 14,726 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of compensation cost | Company recognized compensation expense as follows for the three and nine months ended September 30 (in thousands) : Three Months Ended Nine Months Ended 2023 2022 2023 2022 Total gross compensation expense $ 8 $ 11 $ 36 $ 66 Total tax benefit associated with compensation expense 2 2 8 15 Total net compensation expense $ 6 $ 9 $ 28 $ 51 |
Schedule of unrecognized compensation expense | As of September 30, 2023, the Company expects to record compensation expense in the future as follows (in thousands) : Three months Years ending December 31, 2024 2025 Total gross unrecognized compensation expense $ 8 $ 17 $ 3 Tax benefit associated with unrecognized compensation expense 2 4 1 Total net unrecognized compensation expense $ 6 $ 13 $ 2 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Components of accumulated other comprehensive income | The after-tax components of accumulated other comprehensive loss are as follows (in thousands) : Foreign Pension Accumulated Balance as of December 31, 2022 $ (608) $ 400 $ (208) Current-period change (1) (2,339) — (2,339) Balance as of September 30, 2023 $ (2,947) $ 400 $ (2,547) (1) No material amounts reclassified from accumulated other comprehensive loss. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value, assets measured on recurring basis | The table below presents the recorded amount of financial assets measured at fair value (in thousands) on a recurring basis as of September 30, 2023 and December 31, 2022. September 30, 2023 Level 1 Level 2 Level 3 Total Assets Money Market Funds – JPMorgan Chase, US $ 1,701 $ — $ — $ 1,701 Interest bearing deposits – various banks $ 1,198 — — $ 1,198 Total assets $ 2,899 $ — $ — $ 2,899 Amounts included in: Cash and cash equivalents $ 1,701 $ — $ — $ 1,701 Restricted cash 674 — — 674 Long-term restricted cash 524 — — 524 Total $ 2,899 $ — $ — $ 2,899 December 31, 2022 Level 1 Level 2 Level 3 Total Assets Interest bearing deposits – various banks $ 3,855 — — $ 3,855 Total assets $ 3,855 $ — $ — $ 3,855 Amounts included in: Cash and cash equivalents $ 3,014 $ — $ — $ 3,014 Restricted cash 680 — — 680 Long-term restricted cash 161 — — 161 Total $ 3,855 $ — $ — $ 3,855 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Net sales shipped to customers by geographic region | Consolidated net sales shipped to customers in these regions, along with pack or associate fee and product information for the three and nine months ended September 30, were as follows (in millions, except percentages) : Three Months Ended Nine Months Ended Region 2023 2022 2023 2022 Americas $ 10.7 32.8 % $ 11.1 31.3 % $ 31.8 32.0 % $ 30.6 29.8 % Asia/Pacific 19.6 60.1 % 21.4 60.2 % 60.0 60.4 % 63.2 61.4 % EMEA 2.3 7.1 % 3.0 8.5 % 7.5 7.6 % 9.1 8.8 % Totals $ 32.6 100.0 % $ 35.5 100.0 % $ 99.3 100.0 % $ 102.9 100.0 % |
Product and pack information | Three Months Ended Nine Months Ended 2023 2022 2023 2022 Consolidated product sales $ 31.0 $ 33.6 $ 93.9 $ 97.5 Consolidated pack sales and associate fees 1.2 1.7 4.7 4.8 Consolidated other 0.4 0.2 0.7 0.6 Consolidated total net sales $ 32.6 $ 35.5 $ 99.3 $ 102.9 |
Long-lived assets, by geographic region | Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of September 30, 2023 and December 31, 2022, reside in the following regions, as follows (in millions) : Region September 30, 2023 December 31, 2022 Americas $ 3.9 $ 3.2 Asia/Pacific 0.4 0.6 EMEA — — Total $ 4.3 $ 3.8 |
Inventory balances, by region | Inventory balances, which consist of raw materials, finished goods, and promotional materials, as offset by the allowance for slow moving or obsolete inventories, reside in the following regions (in millions) : Region September 30, 2023 December 31, 2022 Americas $ 8.1 $ 7.5 Asia/Pacific 5.5 5.4 EMEA 1.7 1.8 Total $ 15.3 $ 14.7 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule Of Maturities Of Operating And Finance Leases Liabilities [Table Text Block] | As of September 30, 2023, the Company's future sublease income and minimum future lease payments on operating and finance leases were as follows (in thousands): September 30, 2023 Future Maturities of Leases Operating Leases Finance Leases Sublease Income Remaining 2023 524 89 (33) 2024 1,795 337 (132) 2025 1,115 327 (132) 2026 719 327 (132) Thereafter 917 405 (187) Total minimum lease payments $ 5,070 $ 1,485 $ (616) Imputed interest (402) (191) — Present value of minimum lease payments $ 4,668 $ 1,294 $ (616) |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 USD ($) region | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of regions in which company sells products | region | 3 | ||
Credit card receivables | $ 1,900 | $ 1,900 | |
Cash and cash equivalents held in foreign bank accounts | 3,800 | 11,300 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Line Items] | |||
Restricted cash | 1,800 | 1,400 | |
Accounts receivable, net of allowance | 149 | 218 | |
Other assets | 7,277 | 8,439 | |
Deposits for building leases | 1,300 | 1,300 | |
Fair trade commission deposits | 2,100 | 2,300 | |
Indefinite lived intangible assets | 200 | 200 | |
Notes payable | 300 | 300 | |
Notes payable, current portion | 303 | 263 | |
Other long-term liabilities | 4,172 | 5,026 | |
Accrued lease restoration costs | 300 | 300 | |
Defined benefit plan obligation | 200 | 200 | |
Deferred commissions | 1,779 | 2,476 | |
Amortization of deferred commissions | 800 | ||
Deferred revenue | 3,949 | 5,106 | |
Deferred revenue, revenue recognized during the period | 1,800 | ||
Loyalty deferred revenue, ending balance | $ 2,892 | ||
Percentage of sale returns | 1.50% | ||
Accrued expenses | $ 7,547 | $ 7,500 | 7,510 |
Accrued Employee Benefits, Current | 2,100 | 1,400 | |
Non-inventory accrual, current | 1,700 | 2,800 | |
Other Accrued Liabilities, Current | 1,200 | 700 | |
Accrued expenses | 7,547 | $ 7,500 | 7,510 |
Other Assets, Current | 7,300 | 8,400 | |
Allowance for doubtful accounts | 1,315 | 1,000 | |
Accrued Professional Fees, Current | 800 | 1,000 | |
Accounts receivable, allowance for doubtful accounts | 1,315 | 973 | |
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease) | 344 | ||
Accounts Receivable, Allowance for Credit Loss, Recovery | (2) | ||
South Korea | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Line Items] | |||
Net assets | $ 26,200 | $ 21,300 | |
Software Tools | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Line Items] | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months | ||
Associate Fees | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Line Items] | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Cash And Cash Equivalents, Resticted Cash And Restricted Cash Equivalents [Roll Forward] | ||||
Cash and cash equivalents | $ 7,928 | $ 13,777 | $ 24,185 | |
Restricted Cash and Cash Equivalents, Current | 938 | 944 | 944 | |
Restricted Cash and Cash Equivalents, Noncurrent | 821 | 476 | 503 | |
Cash, cash equivalents and restricted cash | $ 9,687 | $ 15,197 | $ 16,471 | $ 25,632 |
ORGANIZATION AND SUMMARY OF S_5
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loyalty Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Loyalty program | ||
Loyalty deferred revenue, beginning balance | $ 4,167 | $ 4,292 |
Loyalty points forfeited or expired | (3,176) | (3,387) |
Loyalty points used | (6,846) | (10,543) |
Loyalty points vested | 7,880 | 12,773 |
Loyalty points unvested | 867 | 1,032 |
Loyalty deferred revenue, ending balance | 2,892 | 4,167 |
Deferred commissions | 1,779 | $ 2,476 |
Deferred revenue, revenue recognized during the period | $ 1,800 |
ORGANIZATION AND SUMMARY OF S_6
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Sales Returns (Details) - Allowance for Sales Returns - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Sales reserves, beginning balance | $ 59 | $ 55 |
Provision related to sales made in current period | 562 | 783 |
Adjustment related to sales made in prior periods | 219 | (4) |
Actual returns or credits related to current period | (520) | (730) |
Actual returns or credits related to prior periods | (271) | (45) |
Sales reserves, ending balance | $ 49 | $ 59 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,574 | $ 3,302 |
Finished goods | 11,144 | 11,841 |
Inventory reserves for obsolescence | (386) | (417) |
Total | $ 15,332 | $ 14,726 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 43% | 28.40% | 166.10% | 22% |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 17, 2017 | |
Earnings Per Share [Abstract] | |||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 40,000 | 90,000 | |||
Diluted (in shares) | 1,863,000 | 1,949,000 | 1,868,000 | 2,017,000 | |
Average common stock closing price (in dollars per share) | $ 11.90 | $ 20.10 | $ 14.11 | $ 27.58 | |
Basic (in shares) | 1,863,000 | 1,906,000 | 1,868,000 | 1,932,000 | |
Antidilutive securities excluded from earnings per share, amount (in shares) | 200,000 | 100,000 | 100,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 5,000 | 11,807 | |||
Number of shares authorized (in shares) | 370,000 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Jun. 15, 2023 | May 25, 2023 | Mar. 16, 2023 | Mar. 05, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 17, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 370,000 | ||||||||
Number of shares available for grant (in shares) | 108,468 | 108,468 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 5,000 | 11,807 | |||||||
Treasury Stock, Shares, Acquired | 6,058 | 46,332 | 13,454 | 77,743 | |||||
Dividend payable per share (in dollars per share) | $ 0.20 | $ 0.20 | |||||||
Dividends paid | $ 400 | $ 400 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 4.32 | $ 7.21 | |||||||
Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentages of stock option ownership considered for higher exercise price of option | 10% | ||||||||
Vesting period of stock options | 2 years | ||||||||
Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option exercise price as percentages of closing exercise price of stock for specific shareholders | 110% | ||||||||
Vesting period of stock options | 3 years | ||||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period of stock option plan | 10 years | ||||||||
Incentive Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period of stock option plan | 5 years |
STOCK-BASED COMPENSATION - Reco
STOCK-BASED COMPENSATION - Recognized Compensation Expense (Details) - Stock Options - 2017 Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total gross compensation expense | $ 8 | $ 11 | $ 36 | $ 66 |
Total tax benefit associated with compensation expense | 2 | 2 | 8 | 15 |
Total net compensation expense | 6 | $ 9 | 28 | $ 51 |
Total gross unrecognized compensation expense | ||||
Six months ending December 31, 2018 | 8 | 8 | ||
2019 | 17 | 17 | ||
2020 | 3 | 3 | ||
Tax benefit associated with unrecognized compensation expense | ||||
Six months ending December 31, 2018 | 2 | 2 | ||
2019 | 4 | 4 | ||
2020 | 1 | 1 | ||
Total net unrecognized compensation expense | ||||
Six months ending December 31, 2018 | 6 | 6 | ||
2019 | 13 | 13 | ||
2020 | $ 2 | $ 2 |
SHAREHOLDERS' EQUITY - Narrativ
SHAREHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
Jun. 15, 2023 | May 25, 2023 | Mar. 16, 2023 | Mar. 05, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Common Stock | |||||||||||
Treasury Stock, Shares, Acquired | 6,058 | 46,332 | 13,454 | 77,743 | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, shares outstanding (in shares) | 1,860,154 | 1,874,930 | 1,860,154 | 1,874,930 | 1,858,800 | ||||||
Dividends [Abstract] | |||||||||||
Dividend payable per share (in dollars per share) | $ 0.20 | $ 0.20 | |||||||||
Dividends paid | $ 400 | $ 400 | |||||||||
Treasury Stock, Value, Acquired, Cost Method | $ 78 | $ 98 | $ 928 | $ 643 |
SHAREHOLDERS' EQUITY - Accumula
SHAREHOLDERS' EQUITY - Accumulated Other Comprehensive Income (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
45016 | $ 14,176 |
45199 | 10,700 |
Accumulated Other Comprehensive Income, Net | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
45016 | (208) |
Current-period change | (2,339) |
45199 | (2,547) |
Foreign Currency Translation | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
45016 | (608) |
Current-period change | (2,339) |
45199 | (2,947) |
Pension Postretirement Benefit Obligation | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
45016 | 400 |
Current-period change | 0 |
45199 | $ 400 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Amounts included in: | ||
Restricted cash | $ 1,800 | $ 1,400 |
Recurring Basis | ||
Assets | ||
Money Market Funds – JPMorgan Chase, US | 1,701 | |
Interest bearing deposits – various banks | 1,198 | 3,855 |
Amounts included in: | ||
Cash and cash equivalents | 1,701 | 3,014 |
Restricted cash | 674 | 680 |
Long-term restricted cash | 524 | 161 |
Total | 2,899 | 3,855 |
Recurring Basis | Level 1 | ||
Assets | ||
Money Market Funds – JPMorgan Chase, US | 1,701 | |
Interest bearing deposits – various banks | 1,198 | 3,855 |
Amounts included in: | ||
Cash and cash equivalents | 1,701 | 3,014 |
Restricted cash | 674 | 680 |
Long-term restricted cash | 524 | 161 |
Total | 2,899 | 3,855 |
Recurring Basis | Level 2 | ||
Assets | ||
Money Market Funds – JPMorgan Chase, US | 0 | |
Interest bearing deposits – various banks | 0 | 0 |
Amounts included in: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | 0 | 0 |
Recurring Basis | Level 3 | ||
Assets | ||
Money Market Funds – JPMorgan Chase, US | 0 | |
Interest bearing deposits – various banks | 0 | 0 |
Amounts included in: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | $ 0 | $ 0 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 country region | |
Segment Reporting [Abstract] | |
Number of countries in which entity network marketing and distribution channels operates | 24 |
Number of countries in which company operates facilities | 12 |
Number of countries in which entity sells products | 25 |
Number of regions in which company sells products | region | 3 |
Minimum percentage of revenue considered for accounted of major customer | 10% |
SEGMENT INFORMATION - Revenue b
SEGMENT INFORMATION - Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 32,553 | $ 35,513 | $ 99,261 | $ 102,873 | |
Percent of total revenue | 100% | 100% | 100% | 100% | |
Long-lived assets | $ 4,300 | $ 4,300 | $ 3,800 | ||
Inventories, net | 15,332 | 15,332 | 14,726 | ||
Consolidated product sales | |||||
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 31,000 | $ 33,600 | 93,900 | $ 97,500 | |
Consolidated pack sales and associate fees | |||||
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,200 | 1,700 | 4,700 | 4,800 | |
Consolidated other | |||||
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 400 | 200 | 700 | 600 | |
Americas | |||||
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 10,700 | $ 11,100 | $ 31,800 | $ 30,600 | |
Percent of total revenue | 32.80% | 31.30% | 32% | 29.80% | |
Asia/Pacific | |||||
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 19,600 | $ 21,400 | $ 60,000 | $ 63,200 | |
Percent of total revenue | 60.10% | 60.20% | 60.40% | 61.40% | |
EMEA | |||||
Revenue from External Customer [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,300 | $ 3,000 | $ 7,500 | $ 9,100 | |
Percent of total revenue | 7.10% | 8.50% | 7.60% | 8.80% | |
Reportable Geographical Components | Americas | |||||
Revenue from External Customer [Line Items] | |||||
Long-lived assets | $ 3,900 | $ 3,900 | 3,200 | ||
Inventories, net | 8,100 | 8,100 | 7,500 | ||
Reportable Geographical Components | Asia/Pacific | |||||
Revenue from External Customer [Line Items] | |||||
Long-lived assets | 400 | 400 | 600 | ||
Inventories, net | 5,500 | 5,500 | 5,400 | ||
Reportable Geographical Components | EMEA | |||||
Revenue from External Customer [Line Items] | |||||
Long-lived assets | 0 | 0 | 0 | ||
Inventories, net | $ 1,700 | $ 1,700 | $ 1,800 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Lessor, Lease, Description [Line Items] | ||
Finance and Operating Lease Assets | $ 4,985 | $ 4,831 |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | 524 | |
Finance Lease, Liability, Payments, Remainder of Fiscal Year | 89 | |
Lessee, Operating Lease, Liability, Payments, Due in Rolling Year Two | 1,795 | |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 1,115 | |
Finance Lease, Liability, Payments, Due Year Three | 337 | |
Finance Lease, Liability, Payments, Due Year Four | 327 | |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 719 | |
Finance Lease, Liability, Payments, Due Year Five | 327 | |
Lessee Operating Lease Liability Payments Due After Year Six | 917 | |
Finance Lease, Liability, Payments, Due after Year Five | 405 | |
Lessee, Operating Lease, Liability, Payments, Due | 5,070 | |
Finance Lease, Liability, Payment, Due | 1,485 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (402) | |
Finance Lease, Liability, Undiscounted Excess Amount | (191) | |
Operating Lease, Liability | 4,668 | |
Finance Lease, Liability | 1,294 | |
Finance and Operating Lease Liabilities | 5,962 | 5,902 |
Operating Leases, Future Minimum Payments Receivable, Thereafter | (187) | |
Operating Leases, Future Minimum Payments Receivable | (616) | |
Operating Leases, Future Minimum Payments Receivable, in Two Years | (132) | |
Operating Leases, Future Minimum Payments Receivable, in Three Years | (132) | |
Operating Leases, Future Minimum Payments Receivable, in Four Years | (132) | |
Operating Leases, Future Minimum Payments Receivable, Current | $ (33) | |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 6 months | |
Operating Lease, Weighted Average Discount Rate, Percent | 4.60% | |
Finance Lease, Weighted Average Remaining Lease Term | 4 years 5 months 1 day | |
Finance Lease, Weighted Average Discount Rate, Percent | 6.50% | |
Property, Plant and Equipment, Type [Domain] | ||
Lessor, Lease, Description [Line Items] | ||
Finance Lease, Right-of-Use Asset | $ 1,311 | 182 |
Accrued Expenses [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Operating Lease, Liability, Current | 1,698 | 1,600 |
Current portion of capital leases [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Finance Lease, Liability, Current | 272 | 61 |
Other longterm liabilities [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Operating Lease, Liability, Noncurrent | 2,970 | 4,153 |
Finance Lease, Liability, Noncurrent | 1,022 | 88 |
Other Assets [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 3,674 | $ 4,649 |