Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 27, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MANNATECH INC | ||
Entity Central Index Key | 1056358 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $32,487,575 | ||
Entity Common Stock, Shares Outstanding | 2,676,077 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $27,999 | $20,395 |
Restricted cash | 1,511 | 1,519 |
Accounts receivable, net of allowance of $213 and $142 in 2014 and 2013, respectively | 504 | 423 |
Income tax receivable | 4 | 4 |
Inventories, net | 10,591 | 13,988 |
Prepaid expenses and other current assets | 3,069 | 3,061 |
Deferred Commissions | 4,544 | 2,706 |
Deferred tax assets, net | 1,141 | 1,578 |
Total current assets | 49,363 | 43,674 |
Property and equipment, net | 2,481 | 3,170 |
Construction in progress | 1,622 | 69 |
Long-term restricted cash | 7,045 | 4,254 |
Other assets | 3,567 | 3,591 |
Long-term deferred tax assets, net | 3,320 | 1,303 |
Total assets | 67,398 | 56,061 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current portion of capital leases | 901 | 704 |
Accounts payable | 4,252 | 4,996 |
Accrued expenses | 6,356 | 5,796 |
Commissions and incentives payable | 7,908 | 10,210 |
Taxes payable | 2,578 | 1,858 |
Current deferred tax liability | 123 | 114 |
Deferred revenue | 10,890 | 6,380 |
Total current liabilities | 33,008 | 30,058 |
Capital leases, excluding current portion | 852 | 450 |
Long-term deferred tax liabilities | 26 | 9 |
Other long-term liabilities | 2,136 | 2,092 |
Total liabilities | 36,022 | 32,609 |
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, 2,773,972 shares issued and 2,676,077 shares outstanding as of December 31, 2014 and 2,773,972 shares issued and 2,653,913 shares outstanding as of December 31, 2013 | 0 | 0 |
Additional paid-in capital | 40,672 | 42,592 |
Retained earnings (deficit) | 2,750 | -3,746 |
Accumulated other comprehensive loss | -109 | -743 |
Treasury stock, at average cost, 97,895 shares as of December 31, 2014 and 120,059 shares as of December 31, 2013, respectively | -11,937 | -14,651 |
Total shareholders' equity | 31,376 | 23,452 |
Total liabilities and shareholders' equity | $67,398 | $56,061 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
ASSETS | ||
Accounts receivable, allowance for doubtful accounts | $213 | $142 |
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) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 99,000,000 | 99,000,000 |
Common stock, shares issued (in shares) | 2,773,972 | 2,773,972 |
Common stock, shares outstanding (in shares) | 2,676,077 | 2,653,913 |
Treasury stock, shares (in shares) | 97,895 | 120,059 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Net sales | $190,081 | $177,423 |
Cost of sales | 38,350 | 36,097 |
Gross profit | 151,731 | 141,326 |
Operating expenses: | ||
Commissions and incentives | 75,240 | 75,633 |
Selling and administrative expenses | 36,193 | 33,758 |
Depreciation and amortization | 1,608 | 2,120 |
Other operating costs | 25,948 | 25,059 |
Total operating expenses | 138,989 | 136,570 |
Income from operations | 12,742 | 4,756 |
Interest income | 121 | 22 |
Other expense, net | -3,042 | -1,969 |
Income before income taxes | 9,821 | 2,809 |
Income tax (provision) benefit | -3,325 | 365 |
Net income | $6,496 | $3,174 |
Earnings per common share: | ||
Basic (in dollars per share) | $2.44 | $1.20 |
Diluted (in dollars per share) | $2.40 | $1.18 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 2,663 | 2,650 |
Diluted (in shares) | 2,706 | 2,683 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net income | $6,496 | $3,174 |
Foreign currency translations gain (loss) | 653 | -6 |
Pension obligations, net of tax provision of $11 and $39 in 2014 and 2013, respectively | -19 | -60 |
Comprehensive income | $7,130 | $3,108 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Pension obligations, tax | $11 | $39 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Common Stock [Member] | Additional Paid in Capital [Member] | Retained Earnings (Deficit) [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2012 | $0 | $42,614 | ($6,920) | ($677) | ($14,796) | $20,221 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Charge related to stock-based compensation | 0 | 173 | 0 | 0 | 0 | 173 |
Stock option exercises | 0 | -146 | 0 | 0 | 145 | -1 |
Tax shortfall from expiration of stock options | 0 | -84 | 0 | 0 | 0 | -84 |
Tax benefit from exercise of stock options | 0 | 35 | 0 | 0 | 0 | 35 |
Foreign currency translation | 0 | 0 | 0 | -6 | 0 | -6 |
Pension obligations, net of tax | 0 | 0 | 0 | -60 | 0 | -60 |
Net income | 0 | 0 | 3,174 | 0 | 0 | 3,174 |
Balance at Dec. 31, 2013 | 0 | 42,592 | -3,746 | -743 | -14,651 | 23,452 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Charge related to stock-based compensation | 0 | 678 | 0 | 0 | 0 | 678 |
Stock option exercises | 0 | -2,630 | 0 | 0 | 2,714 | 84 |
Tax benefit from exercise of stock options | 0 | 32 | 0 | 0 | 0 | 32 |
Foreign currency translation | 0 | 0 | 0 | 653 | 0 | 653 |
Pension obligations, net of tax | 0 | 0 | 0 | -19 | 0 | -19 |
Net income | 0 | 0 | 6,496 | 0 | 0 | 6,496 |
Balance at Dec. 31, 2014 | $0 | $40,672 | $2,750 | ($109) | ($11,937) | $31,376 |
CONSOLIDATED_STATEMENTS_OF_SHA1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | ||
Pension obligations, tax | $11 | $39 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $6,496 | $3,174 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,608 | 2,120 |
Provision for inventory losses | 2,124 | 1,229 |
Provision for doubtful accounts | 579 | 178 |
(Gain) loss on disposal of assets | -9 | 52 |
Stock-based compensation expense | 678 | 173 |
Deferred income taxes | -1,627 | -2,079 |
Tax benefit from expiration of stock options | -32 | -35 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -713 | -291 |
Income tax receivable | 0 | 880 |
Inventories | 970 | 10 |
Prepaid expenses and other current assets | 945 | 433 |
Other assets | -170 | -496 |
Deferred commissions | -1,943 | -2,126 |
Accounts payable | -709 | 883 |
Accrued expenses | 854 | -373 |
Taxes payable | 803 | -2,054 |
Commissions and incentives payable | -2,102 | 2,441 |
Deferred revenue | 4,749 | 4,860 |
Change in restricted cash | -3,081 | -452 |
Net cash provided by operating activities | 9,420 | 8,527 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | -1,534 | -602 |
Proceeds from sales of assets | 9 | 1 |
Net cash used in investing activities | -1,525 | -601 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from stock options exercised | 84 | 22 |
Tax benefit from exercise of options | 32 | 35 |
Repayment of capital lease obligations | -1,540 | -1,576 |
Net cash used in financing activities | -1,424 | -1,519 |
Effect of currency exchange rate changes on cash and cash equivalents | 1,133 | -389 |
Net increase in cash and cash equivalents | 7,604 | 6,018 |
Cash and cash equivalents at the beginning of the year | 20,395 | 14,377 |
Cash and cash equivalents at the end of the year | 27,999 | 20,395 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Income taxes paid, net | 4,253 | 2,234 |
Interest paid on capital leases | 119 | 137 |
Summary of non-cash investing and financing activities: | ||
Assets acquired through capital lease | 2,141 | 1,044 |
Note receivable, net relating to sale of property and equipment | $0 | $195 |
ORGANIZATION_AND_SUMMARY_OF_SI
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Mannatech, Incorporated (together with its subsidiaries, the “Company”), located in Coppell, Texas, was incorporated in the state of Texas on November 4, 1993 and is listed on the NASDAQ Global Select Market under the symbol “MTEX”. The Company develops, markets, and sells high-quality, proprietary nutritional supplements, topical and skin care and anti-aging products, and weight-management products. We currently sell our products into three regions: (i) North America (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 and Hong Kong). | |||||||||||||||||
Independent associates (“associates”) purchase the Company’s products at published wholesale prices to either sell to retail customers or for personal use. Members purchase the Company’s products at a discount from published retail prices primarily for personal use. The Company cannot distinguish products sold for personal use from other sales because it is not involved with the products after delivery, other than usual and customary product warranties and returns. Only independent associates are eligible to earn commissions and incentives. | |||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The consolidated financial statements and footnotes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Reclassifications | |||||||||||||||||
Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles requires the use of estimates that affect the reported value of assets, liabilities, revenues and expenses. These estimates are based on historical experience and various other factors. The Company continually evaluates the information used to make these estimates as the business and economic environment changes. Historically, actual results have not varied materially from the Company’s estimates and the Company does not currently anticipate a significant change in its assumptions related to these estimates. However, actual results may differ from these estimates under different assumptions or conditions. | |||||||||||||||||
The use of estimates is pervasive throughout the consolidated financial statements, but the accounting policies and estimates considered the most significant are described in this note to the consolidated financial statements, Organization and Summary of Significant Accounting Policies. | |||||||||||||||||
Foreign Currency Translation | |||||||||||||||||
The United States dollar is the functional currency for the majority of the Company’s foreign subsidiaries. As a result, nonmonetary assets and liabilities are translated at their approximate historical rates, monetary assets and liabilities are translated at exchange rates in effect at the end of the year, and revenues and expenses are translated at weighted-average exchange rates for the year. Transaction losses totaled approximately ($3.0) million and ($0.9) million, for the years ended December 31, 2014 and 2013, respectively, and are included in other expense, net in the Company’s Consolidated Statements of Operations. | |||||||||||||||||
The local currency is the functional currency of our subsidiaries in Japan, Republic of Korea, Taiwan, Norway, Sweden, and Mexico. These subsidiaries’ assets and liabilities are translated into the United States dollars at exchange rates existing at the balance sheet dates, revenues and expenses are translated at weighted-average exchange rates, and shareholders’ equity and intercompany balances are translated at historical exchange rates. The foreign currency translation adjustment is recorded as a separate component of shareholders’ equity and is included in accumulated other comprehensive loss. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company includes in its cash and cash equivalents credit card receivables due from its credit card processor, as the cash proceeds from credit card receivables are received within 24 to 72 hours. As of December 31, 2014 and 2013, credit card receivables were $1.2 million and $0.6 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $24.8 million and $14.7 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest bearing deposits. The Company also holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk. | |||||||||||||||||
Restricted Cash | |||||||||||||||||
The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) Australia building lease collateral. As of December 31, 2014 and 2013, our total restricted cash was $8.6 million and $5.8 million, respectively. | |||||||||||||||||
Accounts Receivable | |||||||||||||||||
Accounts receivable are carried at their estimated collectible amounts. Receivables are created upon shipment of an order if the credit card payment is rejected or does not match the order total. As of December 31, 2014 and 2013, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. At December 31, 2014 and 2013, the Company held an allowance for doubtful accounts of $0.2 million and $0.1 million, respectively. Included in accounts receivable at December 31, 2014 and 2013 is a $0.2 million and $0.1 million receivable, net, from an independent associate. | |||||||||||||||||
Inventories | |||||||||||||||||
Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or market. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Property and equipment are stated at cost, less accumulated depreciation and amortization computed using the straight-line method over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Expenditures for maintenance and repairs are charged to expense as incurred. The cost of property and equipment sold or otherwise retired and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in other operating costs in the accompanying Consolidated Statements of Operations. The estimated useful lives of fixed assets are as follows: | |||||||||||||||||
Estimated useful life | |||||||||||||||||
Office furniture and equipment | 5 to 7 years | ||||||||||||||||
Computer hardware and software | 3 to 5 years | ||||||||||||||||
Automobiles | 3 to 5 years | ||||||||||||||||
Leasehold improvements(1) | 2 to 10 years | ||||||||||||||||
(1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. | |||||||||||||||||
Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes a comparison of future projected cash flows generated by the asset or group of assets with its associated net carrying value. If the net carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value. We determined that no impairment indicators existed during the years ended December 31, 2014 and 2013. | |||||||||||||||||
Other Assets | |||||||||||||||||
At each of December 31, 2014 and 2013, other assets were $3.6 million. Included in the December 31, 2014 and 2013 balances were deposits for building leases in various locations of $1.5 million and $1.4 million, respectively. Also included in the December 31, 2014 and 2013 balances were $1.7 million and $1.8 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages. Other assets at each of December 31, 2014 and 2013 also include $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. | |||||||||||||||||
Other Long-Term Liabilities | |||||||||||||||||
Other long-term liabilities were $2.1 million for each of the years ending December 31, 2014 and 2013. Included in the December 31, 2013 balance were long-term financing obligations of $0.2 million. At each of December 31, 2014 and 2013, we recorded $0.7 million in other long-term liabilities related to uncertain income tax positions (see Note 8, Income Taxes). Certain operating leases for the Company’s regional office facilities contain a restoration clause that requires the Company to restore the premises to its original condition. At December 31, 2014 and 2013, accrued restoration costs related to these leases amounted to $0.4 million and $0.2 million, respectively. At each of December 31, 2014 and 2013, the Company also recorded a long-term liability for an estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations of $0.6 million (See Note 10, Employee Benefit Plans). | |||||||||||||||||
Revenue Recognition and Deferred Commissions | |||||||||||||||||
The Company’s revenue is derived from sales of individual products, sales of its starter and renewal packs, and shipping fees. Substantially all of the Company’s product and pack sales are made to associates at published wholesale prices and to members at discounted published retail prices. The Company records revenue net of any sales taxes and records a reserve for expected sales returns based on its historical experience. | |||||||||||||||||
The Company recognizes revenue from shipped packs and products upon receipt by the customer. Corporate-sponsored event revenue is recognized when the event is held. The Company defers certain components of its revenue. At December 31, 2014 and December 31, 2013, the Company’s deferred revenue was $10.9 million and $6.4 million, respectively. During the third quarter of 2013, the Company started a loyalty program through which customers earn loyalty points from qualified automatic orders, which can be applied to future purchases. The Company defers the dollar equivalent in revenue of these points until the points are applied or forfeited, which includes an estimate of the percentage of the unvested loyalty points that are expected to be forfeited. During the third quarter 2014, the Company modified the program to allow loyalty points to vest more quickly. The deferred revenue associated with the loyalty program at December 31, 2014 and December 31, 2013 was $9.7 million and $5.5 million, respectively. Deferred revenue consisted primarily of: (i) sales of packs and products shipped but not received by the customers by the end of the respective period; (ii) revenue from the loyalty program; and (iii) prepaid registration fees from customers planning to attend a future corporate-sponsored event. In total current assets, the Company defers commissions on (i) the sales of packs and products shipped but not received by the customers by the end of the respective period and (ii) the loyalty program. Deferred commissions were $4.5 million and $2.7 million at December 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||
Loyalty program | (in thousands) | ||||||||||||||||
Loyalty deferred revenue as of June 30, 2013 | $ | — | |||||||||||||||
Loyalty points forfeited | (1,136 | ) | |||||||||||||||
Loyalty points used | (723 | ) | |||||||||||||||
Loyalty points vested | 5,072 | ||||||||||||||||
Loyalty points unvested | 2,243 | ||||||||||||||||
Loyalty deferred revenue as of December 31, 2013 | $ | 5,456 | |||||||||||||||
Loyalty deferred revenue as of January 1, 2014 | $ | 5,456 | |||||||||||||||
Loyalty points forfeited | (4,664 | ) | |||||||||||||||
Loyalty points used | (12,348 | ) | |||||||||||||||
Loyalty points vested | 19,580 | ||||||||||||||||
Loyalty points unvested | 1,679 | ||||||||||||||||
Loyalty deferred revenue as of December 31, 2014 | $ | 9,703 | |||||||||||||||
We estimate a sales return reserve for expected sales refunds based on our historical experience over a rolling six-month period. If actual results differ from our estimated sales return reserve due to various factors, the amount of revenue recorded for each period could be materially affected. Historically, our sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale. Sales returns have historically averaged 1.5% or less of our gross sales. For the year ended December 31, 2014 our sales return reserve consisted of the following (in thousands): | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
Sales reserve as of January 1, 2014 | $ | 238 | |||||||||||||||
Provision related to sales made in current period | 1,618 | ||||||||||||||||
Adjustment related to sales made in prior periods | 10 | ||||||||||||||||
Actual returns or credits related to current period | (1,411 | ) | |||||||||||||||
Actual returns or credits related to prior periods | (248 | ) | |||||||||||||||
Sales reserve as of December 31, 2014 | $ | 207 | |||||||||||||||
Shipping and Handling Costs | |||||||||||||||||
The Company records freight and shipping fees collected from its customers as revenue. The Company records inbound freight as a component of inventory and cost of sales. Total revenue from freight and shipping fees were approximately $7.4 million and $7.7 million for the years ended December 31, 2014 and 2013, respectively. Total freight costs for shipping products to our customers included in cost of sales were approximately $6.7 million and $6.8 million for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||
Commission and Incentive Expenses | |||||||||||||||||
Associates earn commissions and incentives based on their direct and indirect commissionable net sales over 13 business periods. Each business period equals 28 days. The Company accrues commissions and incentives when earned by associates and pays commissions on product sales three weeks following the business period end and pays commissions on its pack sales five weeks following the business period end. | |||||||||||||||||
Advertising Expenses | |||||||||||||||||
The Company expenses advertising and promotions in selling and administrative expenses when incurred. Advertising and promotional expenses were approximately $4.9 million and $4.3 million, for the years ended December 31, 2014 and 2013, respectively. Educational and promotional items, called sales aids, are sold to associates to assist in their sales efforts and are included in inventories and charged to cost of sales when sold. | |||||||||||||||||
Research and Development Expenses | |||||||||||||||||
The Company expenses research and development expenses as incurred. Research and development expenses related to new product development, enhancement of existing products, clinical studies and trials, Food and Drug Administration compliance studies, general supplies, internal salaries, third-party contractors, and consulting fees were approximately $1.6 million for the years ended December 31, 2014 and 2013. Salaries and contract labor are included in selling and administrative expenses and all other research and development costs are included in other operating costs. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The Company currently has one active stock-based compensation plan, which was approved by its shareholders at its 2008 Annual Shareholder’s meeting held on June 18, 2008 and amended at the 2010, 2012, and 2014 Annual Shareholder meetings. The Company grants stock options to its employees, consultants, and board members with an exercise price equal to the closing price of its common stock on the date of grant with a term no greater than 10 years. The majority of stock options vest over two or three years. Incentive stock options granted to shareholders who own 10% or more of the Company’s outstanding stock are granted at an exercise price that may not be less than 110% of the closing price of the Company’s common stock on the date of grant and have a term no greater than five years. At the date of grant, the Company determines the fair value of the stock option award and recognizes compensation expense over the requisite service period, or the vesting period of the award. The fair value of the stock option award is calculated using the Black-Scholes option-pricing model. The Company records stock-based compensation expense in selling and administrative expenses. | |||||||||||||||||
Software Development Costs | |||||||||||||||||
The Company capitalizes qualifying internal payroll and external contracting and consulting costs related to the development of internal use software that are incurred during the application development stage, which includes design of the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project along with post-implementation stages of internal use software are expensed as incurred. The Company amortizes such costs over the estimated useful life of the software, which is three to five years once the software is placed in service. | |||||||||||||||||
Other Operating Costs | |||||||||||||||||
Other operating costs include travel, accounting/legal/consulting fees, credit card processing fees, banking fees, off-site storage fees, utilities, and other miscellaneous operating expenses. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company determines the provision for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. The Company evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance for the portion of any deferred tax assets where the likelihood of realizing an income tax benefit in the future does not meet the more likely than not criterion for recognition. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. | |||||||||||||||||
Comprehensive Income and Accumulated Other Comprehensive Loss | |||||||||||||||||
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Norway, Sweden and Mexico operations, and changes in the pension obligation for its Japanese employees. | |||||||||||||||||
Concentration Risk | |||||||||||||||||
A significant portion of our revenue is derived from three product lines: Ūth TM Skin Rejuvenation, NutiVerus, and our core Ambrotose® complex products, which include the Ambrotose® products and Advanced Ambrotose® products. A decline in sales value of such products could have a material adverse effect on our earnings, cash flows, and financial position. Revenue from these products were as follows for the years ended December 31, 2014 and 2013 (in thousands, except percentages): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Sales by | % of total | Sales by | % of total | ||||||||||||||
product | net sales | product | net sales | ||||||||||||||
Advanced Ambrotose® | $ | 63,791 | 33.6 | % | $ | 59,894 | 33.7 | % | |||||||||
Ambrotose® | 10,895 | 5.7 | % | 10,939 | 6.2 | % | |||||||||||
Ūth TM Skin Rejuvenation | 13,431 | 7.1 | % | 2,406 | 1.4 | % | |||||||||||
NutriVerus | 10,530 | 5.5 | % | 10,964 | 6.2 | % | |||||||||||
Total | $ | 98,647 | 51.9 | % | $ | 84,203 | 47.5 | % | |||||||||
Our business is not currently exposed to customer concentration risk given that no independent associate has ever accounted for more than 10% of our consolidated net sales. | |||||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, investments, receivables, and restricted cash. The Company utilizes financial institutions that the Company considers to be of high credit quality and periodically evaluates the credit rating of such institutions and the allocation of their investments to minimize exposure to credit concentration risk. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The fair value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, time deposits, money market investments, receivables, payables, and accrued expenses, approximate their carrying values due to their relatively short maturities. See Note 3 to our Consolidated Financial Statements, Fair Value, for more information. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2014 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of goods to customers in an amount that reflects the consideration to which the entity expects in exchange for those goods. To achieve that core principle, an entity should apply the following steps: | |
-Step 1: Identify the contract(s) with a customer. | |
-Step 2: Identify the performance obligations in the contract. | |
-Step 3: Determine the transaction price. | |
-Step 4: Allocate the transaction price to the performance obligations in the contract. | |
-Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |
The standard is effective for the Company for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures.) Early application is not permitted. Management is currently evaluating the impact of the Company’s pending adoption of ASU 2014-09 on the Company’s consolidated financial statements and has not yet determined the method by which the Company will adopt the standard in 2017. | |
Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
FAIR_VALUE
FAIR VALUE | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
FAIR VALUE [Abstract] | |||||||||||||||||
FAIR VALUE | NOTE 3: FAIR VALUE | ||||||||||||||||
The Company utilizes fair value measurements to record fair value adjustments to certain financial assets and to determine fair value disclosures. | |||||||||||||||||
Fair Value Measurements (Topic 820) of the FASB establishes a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories: | |||||||||||||||||
· Level 1—Quoted unadjusted prices for identical instruments in active markets. | |||||||||||||||||
· Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. | |||||||||||||||||
· Level 3—Model derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. | |||||||||||||||||
The primary objective of the Company’s investment activities is to preserve principal while maximizing yields without significantly increasing risk. The investment instruments held by the Company are money market funds and interest bearing deposits for which quoted market prices are readily available. The Company considers these highly liquid investments to be cash equivalents. These investments are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The tables below present the recorded amount of financial assets measured at fair value (in thousands) on a recurring basis as of December 31, 2014 and 2013. The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at December 31, 2014 and 2013. | |||||||||||||||||
2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money Market Funds – Fidelity, US | $ | 392 | $ | — | $ | — | $ | 392 | |||||||||
Interest bearing deposits – various banks | 12,322 | — | — | 12,322 | |||||||||||||
Total | $ | 12,714 | $ | — | $ | — | $ | 12,714 | |||||||||
Amounts included in: | |||||||||||||||||
Cash and cash equivalents | $ | 6,159 | $ | — | $ | — | $ | 6,159 | |||||||||
Restricted Cash | 738 | — | — | 738 | |||||||||||||
Long-term restricted cash | 5,817 | — | — | 5,817 | |||||||||||||
Total | $ | 12,714 | $ | — | $ | — | $ | 12,714 | |||||||||
2013 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money Market Funds – Fidelity, US | $ | 192 | $ | — | $ | — | $ | 192 | |||||||||
Interest bearing deposits – various banks | 6,803 | — | — | 6,803 | |||||||||||||
Total | $ | 6,995 | $ | — | $ | — | $ | 6,995 | |||||||||
Amounts included in: | |||||||||||||||||
Cash and cash equivalents | $ | 3,044 | $ | — | $ | — | $ | 3,044 | |||||||||
Restricted Cash | 329 | — | — | 329 | |||||||||||||
Long-term restricted cash | 3,622 | — | — | 3,622 | |||||||||||||
Total | $ | 6,995 | $ | — | $ | — | $ | 6,995 |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORIES [Abstract] | |||||||||
INVENTORIES | NOTE 4: INVENTORIES | ||||||||
Inventories consist of raw materials, finished goods, and promotional materials. The Company provides an allowance for any slow-moving or obsolete inventories. Inventories as of December 31, 2014 and 2013, consisted of the following (in thousands): | |||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 2,118 | $ | 4,396 | |||||
Finished goods | 10,615 | 11,601 | |||||||
Inventory reserves for obsolescence | (2,142 | ) | (2,009 | ) | |||||
Total | $ | 10,591 | $ | 13,988 |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY AND EQUIPMENT [Abstract] | |||||||||
PROPERTY AND EQUIPMENT | NOTE 5: PROPERTY AND EQUIPMENT | ||||||||
As of December 31, 2014 and 2013, property and equipment consisted of the following (in thousands): | |||||||||
2014 | 2013 | ||||||||
Office furniture and equipment | $ | 8,666 | $ | 8,797 | |||||
Computer hardware | 7,738 | 7,779 | |||||||
Computer software | 46,791 | 46,535 | |||||||
Automobiles | 81 | 111 | |||||||
Leasehold improvements | 12,270 | 11,920 | |||||||
75,546 | 75,142 | ||||||||
Less accumulated depreciation and amortization | (73,065 | ) | (71,972 | ) | |||||
Property and equipment, net | 2,481 | 3,170 | |||||||
Construction in progress | 1,622 | 69 | |||||||
Total | $ | 4,103 | $ | 3,239 |
CAPITAL_LEASE_OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
CAPITAL LEASE OBLIGATIONS [Abstract] | |||||
CAPITAL LEASE OBLIGATIONS | NOTE 6: CAPITAL LEASE OBLIGATIONS | ||||
As of December 31, 2014 and 2013, the net book value of leased assets was $1.3 million and $0.6 million, respectively for leased equipment, purchased licenses, and corporate insurance. The future minimum lease payments (in thousands) are as follows: | |||||
2015 | $ | 967 | |||
2016 | 444 | ||||
2017 | 319 | ||||
2018 | 133 | ||||
2019 | — | ||||
Total future minimum lease payments | 1,863 | ||||
Less: Amounts representing interest (effective interest rate 6.1%) | (110 | ) | |||
Present value of minimum lease payments | 1,753 | ||||
Current portion of capital lease obligations | (901 | ) | |||
Long-term portion of capital lease obligations | $ | 852 |
ACCRUED_EXPENSES
ACCRUED EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
ACCRUED EXPENSES [Abstract] | |||||||||
ACCRUED EXPENSES | NOTE 7: ACCRUED EXPENSES | ||||||||
As of December 31, 2014 and 2013, accrued expenses consisted of the following (in thousands): | |||||||||
2014 | 2013 | ||||||||
Accrued asset purchases | $ | 291 | $ | 75 | |||||
Accrued compensation | 2,180 | 1,964 | |||||||
Accrued royalties | 105 | 104 | |||||||
Accrued sales and other taxes | 1,193 | 170 | |||||||
Other accrued operating expenses (1) | 786 | 962 | |||||||
Customer deposits and sales returns | 211 | 243 | |||||||
Accrued travel expenses related to corporate events | 107 | 303 | |||||||
Accrued shipping and handling costs | 344 | 812 | |||||||
Rent expense | 147 | 150 | |||||||
Accrued legal and accounting fees | 992 | 1,013 | |||||||
$ | 6,356 | $ | 5,796 | ||||||
-1 | 2013 balance includes $190 for the Korea Busan Custom Office assessment, resulting from an audit covering fiscal years 2008 through 2012, which was paid in January 2014. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
INCOME TAXES | NOTE 8: INCOME TAXES | ||||||||||||
The components of the Company’s income before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands): | |||||||||||||
2014 | 2013 | ||||||||||||
United States | $ | 2,044 | $ | 702 | |||||||||
Foreign | 7,777 | 2,107 | |||||||||||
$ | 9,821 | $ | 2,809 | ||||||||||
The components of the Company’s income tax provision (benefit) for the years ended December 31 are as follows (in thousands): | |||||||||||||
Current provision: | 2014 | 2013 | |||||||||||
Federal | $ | 2,433 | $ | 124 | |||||||||
State | 43 | 144 | |||||||||||
Foreign | 2,547 | 1,434 | |||||||||||
5,023 | 1,702 | ||||||||||||
Deferred provision (benefit): | |||||||||||||
Federal | (1,792 | ) | (1,883 | ) | |||||||||
State | 349 | — | |||||||||||
Foreign | (255 | ) | (184 | ) | |||||||||
(1,698 | ) | (2,067 | ) | ||||||||||
$ | 3,325 | $ | (365 | ) | |||||||||
A reconciliation of the Company’s effective income tax rate and the United States federal statutory income tax rate is summarized as follows, for the years ended December 31: | |||||||||||||
2014 | 2013 | ||||||||||||
Federal statutory income taxes | 35 | % | 35 | % | |||||||||
State income taxes, net of federal benefit | 3.5 | 1.3 | |||||||||||
Difference in foreign and United States tax on foreign operations | (16.1 | ) | (11.6 | ) | |||||||||
Effect of changes in valuation allowance for net operating loss carryforwards | 14.3 | (55.9 | ) | ||||||||||
Effect of change in uncertain tax positions (net) | 0.5 | (17.0 | ) | ||||||||||
Federal Sub-Part F Income from foreign operations | 2.9 | 11.8 | |||||||||||
Other | (6.2 | ) | 23.4 | ||||||||||
33.9 | % | (13.0 | )% | ||||||||||
For the years ended December 31, 2014 and 2013, the Company’s effective tax rate was 33.9% and (13.0)% respectively. For 2014, the effective tax rate was close to what would have been expected if the federal statutory rate was applied to income before taxes. Items increasing the effective income tax rate included the change in the valuation allowances associated with certain deferred tax assets, U.S. federal tax on deemed foreign dividend distribution, and “subpart F income” resulting from controlled foreign corporation operations. Items decreasing the effective income tax rate included the foreign tax credits. For 2013, the effective income tax rate was lower than what would be expected if the federal statutory income tax rate were applied to income before taxes primarily because of the tax benefit recognized from an IRS tax audit settlement, reversal of valuation allowances against net deferred tax assets and differences from foreign operations. | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consisted of the following at December 31 (in thousands): | |||||||||||||
Deferred tax assets: | 2014 | 2013 | |||||||||||
Current: | |||||||||||||
Deferred revenue | $ | 453 | $ | (26 | ) | ||||||||
Inventory capitalization | 171 | 228 | |||||||||||
Inventory reserves | 762 | 644 | |||||||||||
Accrued expenses | 697 | 917 | |||||||||||
Other | 127 | 108 | |||||||||||
Total current deferred tax assets | 2,210 | 1,871 | |||||||||||
Noncurrent: | |||||||||||||
Depreciation and amortization | 1,867 | 1,834 | |||||||||||
Net operating loss(1) | 5,842 | 5,078 | |||||||||||
Deferred royalty | 28 | 39 | |||||||||||
Non-cash accounting charges related to stock options and warrants | 628 | 520 | |||||||||||
Accrued expenses | 350 | 366 | |||||||||||
Foreign tax credit carryover | 3,855 | — | |||||||||||
Other | 506 | 843 | |||||||||||
Total noncurrent deferred tax assets | 13,076 | 8,680 | |||||||||||
Total deferred tax assets | 15,286 | 10,551 | |||||||||||
Valuation allowance | (9,745 | ) | (5,264 | ) | |||||||||
Total deferred tax assets, net of valuation allowance | $ | 5,541 | $ | 5,287 | |||||||||
Deferred tax liabilities: | |||||||||||||
Current: | |||||||||||||
Prepaid expenses | $ | 413 | $ | 396 | |||||||||
Deferred Commissions | 769 | 5 | |||||||||||
Other | 10 | — | |||||||||||
Total current deferred tax liabilities | 1,192 | 401 | |||||||||||
Noncurrent: | |||||||||||||
Internally-developed software | 11 | 15 | |||||||||||
Depreciation and amortization | 2 | 2 | |||||||||||
Sub-Part F Income Deferred | — | 2,163 | |||||||||||
Other | 24 | (52 | ) | ||||||||||
Total noncurrent deferred tax liabilities | 37 | 2,128 | |||||||||||
Total deferred tax liabilities | $ | 1,229 | $ | 2,529 | |||||||||
(1) The Company’s net operating loss will expire as follows (dollar amounts in thousands): | |||||||||||||
Jurisdiction | Gross NOL | Tax Effected NOL | Expiration Years | ||||||||||
Canada | $ | — | — | 2043 | |||||||||
Cyprus | 5 | 1 | 2019 | ||||||||||
Denmark | 1 | — | Indefinite | ||||||||||
Mexico | 9,000 | 2,700 | 2020-2023 | ||||||||||
Norway | 448 | 121 | Indefinite | ||||||||||
Singapore | 28 | 5 | Indefinite | ||||||||||
Sweden | 541 | 119 | Indefinite | ||||||||||
Switzerland | 13,612 | 1,234 | 2016-2020 | ||||||||||
Taiwan | 7,152 | 1,215 | 2016-2023 | ||||||||||
Ukraine | 678 | 122 | Indefinite | ||||||||||
United States (states) | 12,996 | 325 | 2015-2032 | ||||||||||
At December 31, 2014 and 2013, the Company’s valuation allowance was $9.7 million and $5.3 million, respectively. The provisions of ASC Topic 740 require a company to record a valuation allowance when the “more likely than not” criterion for realizing a deferred tax asset cannot be met. A company is to use judgment in reviewing both positive and negative evidence of realizing a deferred tax asset. Furthermore, the weight given to the potential effect of such evidence is commensurate with the extent the evidence can be objectively verified. | |||||||||||||
The valuation allowances presented below (in millions) at December 31, 2014 and 2013, represented a reserve against the Company’s net deferred tax asset the Company believed the “more likely than not” criterion for recognition purposes could not be met. The U.S. valuation allowance increased due to the carryover of foreign tax credits that we do not anticipate to utilize in future years. | |||||||||||||
Country | 2014 | 2013 | |||||||||||
Mexico | $ | 2.7 | $ | 2.7 | |||||||||
Norway | 0.1 | 0.2 | |||||||||||
Sweden | 0.1 | 0.1 | |||||||||||
Switzerland | 1.2 | 0.2 | |||||||||||
Taiwan | 1.2 | 1.2 | |||||||||||
Ukraine | 0.1 | 0.1 | |||||||||||
United States | 4.3 | 0.8 | |||||||||||
Total | $ | 9.7 | $ | 5.3 | |||||||||
At December 31, 2014 and 2013, the Company did not record a provision for any United States or foreign withholding taxes on its undistributed earnings related to its foreign subsidiaries because it is the intention of the Company to reinvest its undistributed earnings indefinitely in its foreign operations. Generally, such earnings become subject to United States income tax upon the remittance of dividends and under certain other circumstances. At December 31, 2014, it is not practicable to estimate the amount of deferred tax liability on such undistributed earnings. | |||||||||||||
Deferred tax assets (liabilities) are classified in the accompanying Consolidated Balance Sheets of December 31 as follows (in thousands): | |||||||||||||
2014 | 2013 | ||||||||||||
Current deferred tax assets | $ | 1,141 | $ | 1,578 | |||||||||
Noncurrent deferred tax assets | 3,320 | 1,303 | |||||||||||
Current deferred tax liabilities | (123 | ) | (114 | ) | |||||||||
Other long-term liabilities | (26 | ) | (9 | ) | |||||||||
Net deferred tax assets | $ | 4,312 | $ | 2,758 | |||||||||
On January 1, 2007, the Company adopted FIN 48, which was codified into Topic 740, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements, uncertain tax positions that it has taken or expects to take on a tax return. Topic 740 requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of December 31, 2014, the Company recorded $0.1 million in current liabilities and $0.7 million in other long-term liabilities related to uncertain income tax positions and income tax reserves associated with various audits. At December 31, 2014, the Company had gross tax-affected unrecognized tax benefits of $0.8 million that, if recognized, would impact the effective tax rate. The Company recognizes penalties and interest charges related to unrecognized tax benefits in current tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows, for the years ended December 31, 2014 and 2013 (in thousands): | |||||||||||||
2014 | 2013 | ||||||||||||
Balance as of January 1 | $ | 738 | $ | 3,039 | |||||||||
Additions for tax positions related to the current year | 1 | 436 | |||||||||||
Additions for tax positions of prior years | 111 | 292 | |||||||||||
Reductions of tax positions of prior years | (47 | ) | (3,029 | ) | |||||||||
Balance as of December 31 | $ | 803 | $ | 738 | |||||||||
The examination of our 2005-2009 tax years by the IRS for U.S. federal tax purposes was settled during the second quarter of 2013. In connection with the audit, the IRS and the Company agreed to a net tax deficiency of $0.8 million and the payment of interest accrued through June 30, 2013 of $0.2 million, without any penalties, which was paid during the third quarter of 2013. In connection with the settlement of the audit, the Company reclassified amounts owed to the IRS and previously recorded as uncertain tax positions as taxes payable, resulting in a $1.0 million tax benefit during the year of 2013. | |||||||||||||
The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2014, the tax years that remained subject to examination by a major tax jurisdiction for the Company’s most significant subsidiaries were as follows: | |||||||||||||
Jurisdiction | Open Years | ||||||||||||
Australia | 2010-2014 | ||||||||||||
Canada | 2010-2014 | ||||||||||||
Denmark | 2011-2014 | ||||||||||||
Japan | 2011-2014 | ||||||||||||
Mexico | 2010-2014 | ||||||||||||
Norway | 2008-2014 | ||||||||||||
Republic of Korea | 2009-2014 | ||||||||||||
Singapore | 2010-2014 | ||||||||||||
South Africa | 2011-2014 | ||||||||||||
Sweden | 2009-2014 | ||||||||||||
Switzerland | 2009-2014 | ||||||||||||
Taiwan | 2009-2014 | ||||||||||||
United Kingdom | 2008-2014 | ||||||||||||
United States | 2008-2014 |
TRANSACTIONS_WITH_RELATED_PART
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES [Abstract] | |||||||||
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES | NOTE 9: TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES | ||||||||
For the year ended December 31, 2014, the Company has accrued donations of $0.5 million to the M5M Foundation, a non-profit organization that works to combat the epidemic of childhood malnutrition on a global scale. Several of the Company’s directors and officers and their family members serve on the board of the M5M Foundation, including: | |||||||||
· | Al Bala, the Company’s President; | ||||||||
· | Rob Sinnott, the Company’s CEO and Chief Science Officer; | ||||||||
· | Landen Fredrick, son of J. Stanley Fredrick, the Company’s Chairman of the Board and a major shareholder; and | ||||||||
· | Lorrie Fry, the daughter of Larry Jobe (a member of our Board). | ||||||||
During 2014, we paid employment compensation of approximately $170,000 in salary, bonus, auto allowance, and other compensation to Landen Fredrick, son of J. Stanley Fredrick, the Company’s Chairman of the Board and a major shareholder. In addition, Landen Fredrick participated in the employee health care benefit plans available to all employees of the Company. Landen Fredrick has served as Vice President, Global Operations since May of 2013. Prior to that, Mr. Fredrick served as Vice President, North American Sales and Operations since January of 2011, as Vice President, North American Sales since February of 2010 and as Senior Director of Tools and Training since his hire in May of 2006. Landen Fredrick also serves on the Board of the M5M Foundation. | |||||||||
Mr. Ray Robbins is a member of the Company’s Board of Directors and a major shareholder. Mr. Robbins holds positions in the Company’s associate global downline network marketing system. In addition, several of Mr. Robbins’ family members are independent associates. The Company pays commissions and incentives to its independent associates and during 2014 and 2013, the Company paid aggregate commissions and incentives to Mr. Robbins and his family of approximately $2.9 million and $2.6 million, respectively. The aggregate amount of commission and incentives paid to Mr. Robbins was approximately $2.6 million and $2.4 million in 2014 and 2013, respectively. The aggregate amount of commission and incentives paid to family members was approximately $0.3 million in each of 2014 and 2013, of which $0.2 million was paid each year to his son, Kevin Robbins, and $0.1 million was paid each year to his daughter, Marla Finley, and daughter-in-law, Demra Robbins, who both share an account. All commissions and incentives paid to Mr. Robbins and his family members are in accordance with the Company’s global associate career and compensation plan. The Company has also contracted with a software development firm owned by Ryan Robbins, the son of Mr. Ray Robbins. The value of services performed during 2014 were less than $0.1 million. | |||||||||
Johanna Bala, the wife of Al Bala, the Company's President, is an independent associate who earns commissions and incentives. The aggregate amount of commission and incentives paid to Johanna Bala was approximately $0.2 million and $0.1 million in 2014 and 2013, respectively. | |||||||||
Mr. Samuel Caster is the Company’s founder and former Chairman of the Board. Prior to January 2014, Mr. Caster’s beneficial ownership of the Company was approximately 18%, but in January 2014 fell below 5%. | |||||||||
Mr. Caster founded MannaRelief in 1999 and served as its Chairman from 1999 through August 2007. MannaRelief employs William A. Mullens, Mr. Caster’s brother-in-law, as its Executive Director. Mr. Caster’s wife, Linda Caster, serves as MannaRelief’s Chairman of the Board. MannaRelief is a 501(c)(3) charitable organization that provides charitable services for children. MannaRelief is not owned or operated by the Company. | |||||||||
Historically, the Company has made cash donations to MannaRelief, sold products to MannaRelief at cost plus shipping and handling charges, and shipped products purchased by MannaRelief to its chosen recipients. In addition, certain Company employees and consultants periodically volunteer to work or host various fund raising projects and events for MannaRelief at no cost to MannaRelief. | |||||||||
The Company has made cash donations and sold products to MannaRelief as follows: | |||||||||
2014 | 2013 | ||||||||
Sold Products | $ | 0.3million | $ | 0.2million | |||||
Contributed Cash Donations | $ | 0.3million | $ | 0.9million | |||||
Beginning on December 1, 2011, the Company entered into a series of successive Consulting Agreements with WonderEnterprises, LLC (f/k/a Salinda Enterprises, LLC; hereinafter “Wonder”), where the Company paid Wonder for consulting services performed by Mr. Caster plus reimbursable expenses. Mr. Caster is the owner and an employee of Wonder. For each of the years ended December 31, 2014 and 2013, Mr. Caster received $0.1 million and $0.7 million, respectively, for consulting services under these Consulting Agreements. Pursuant to the termination of the final Consulting Agreement according to its terms on February 28, 2014, Mr. Caster is no longer serving as a consultant for the Company. | |||||||||
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
EMPLOYEE BENEFIT PLANS [Abstract] | |||||||||
EMPLOYEE BENEFIT PLANS | NOTE 10: EMPLOYEE BENEFIT PLANS | ||||||||
Employee Retirement Plan | |||||||||
Effective May 9, 1997, the Company adopted a Defined Contribution 401(k) and Profit Sharing Plan (the “401(k) Plan”) for its United States and Canada employees. The 401(k) Plan covers all regular full-time and part-time employees who have completed three months of service and attained the age of twenty-one. United States employees can contribute up to 100 percent of their annual compensation but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) plan permits matching and discretionary employer contributions. The Company’s matching contributions for its United States and Canada employees vest ratably over a five-year period. During the years ended December 31, 2014 and 2013, the Company contributed approximately $0.2 million and $0.1 million, respectively, to the 401(k) Plan for matching contributions. | |||||||||
The Company also sponsors a non-U.S. defined benefit plan covering its employees in its Japan subsidiary (the “Benefit Plan”). Benefits under the Benefit Plan are based on a point system for position grade and years of service. The Company utilizes actuarial methods. Inherent in the application of these actuarial methods are key assumptions, including, but not limited to, discount rates and expected long-term rates of return on plan assets. Changes in the related Benefit Plan costs may occur in the future due to changes in the underlying assumptions, changes in the number and composition of plan participants, and changes in the level of benefits provided. The Company uses a measurement date of December 31 to evaluate and record any post-retirement benefits related to the Benefit Plan. | |||||||||
Projected Benefit Obligation and Fair Value of Plan Assets | |||||||||
The Benefit Plan’s projected benefit obligation and valuation of plan assets were as follows for the years ended December 31 (in thousands): | |||||||||
Projected benefit obligation: | 2014 | 2013 | |||||||
Balance, beginning of year | $ | 629 | $ | 714 | |||||
Service cost | 88 | 106 | |||||||
Interest cost | 3 | 6 | |||||||
Liability losses | (6 | ) | 59 | ||||||
Benefits paid to participants | (122 | ) | (121 | ) | |||||
Special termination benefit | 34 | — | |||||||
Prior service cost | — | — | |||||||
Foreign currency | (77 | ) | (135 | ) | |||||
Balance, end of year | $ | 549 | $ | 629 | |||||
Plan assets: | 2014 | 2013 | |||||||
Fair value, beginning of year | $ | — | $ | — | |||||
Company contributions | 122 | 121 | |||||||
Benefits paid to participants | (122 | ) | (121 | ) | |||||
Fair value, end of year | $ | — | $ | — | |||||
Funded status of the Benefit Plan as of December 31 (in thousands): | 2014 | 2013 | |||||||
Benefit obligation | $ | (549 | ) | $ | (629 | ) | |||
Fair value of plan assets | — | — | |||||||
Excess of benefit obligation over fair value of plan assets | $ | (549 | ) | $ | (629 | ) | |||
Amounts recognized in the accompanying Consolidated Balance Sheets consist of, as of December 31 (in thousands): | 2014 | 2013 | |||||||
Accrued benefit liability | $ | (549 | ) | $ | (629 | ) | |||
Transition obligation and unrealized gain | (372 | ) | (458 | ) | |||||
Net amount recognized in the consolidated balance sheets | $ | (921 | ) | $ | (1,087 | ) | |||
Years Ended December 31, | |||||||||
Other changes recognized in comprehensive income/loss (in thousands): | 2014 | 2013 | |||||||
Net periodic cost | $ | 85 | $ | 64 | |||||
Current year (gain) loss | (6 | ) | 59 | ||||||
Amortization of transition obligation | (4 | ) | (4 | ) | |||||
Total recognized in other comprehensive income | (10 | ) | 55 | ||||||
Total recognized in comprehensive income (loss) | $ | 75 | $ | 119 | |||||
As of December 31, | |||||||||
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain/loss (in thousands): | 2014 | 2013 | |||||||
Transition obligation | $ | 13 | $ | 66 | |||||
Prior service cost | 353 | 447 | |||||||
Net actuarial gain | 6 | (55 | ) | ||||||
Total recognized in accumulated other comprehensive loss | $ | 372 | $ | 458 | |||||
2015 estimated amounts of amortized transition obligation (in thousands): | 2015 | ||||||||
Transition obligation | $ | (4 | ) | ||||||
As of December 31, | |||||||||
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets (in thousands): | 2014 | 2013 | |||||||
Projected benefit obligation | $ | 549 | $ | 629 | |||||
Accumulated benefit obligation | 549 | 629 | |||||||
Fair value of plan assets | — | — | |||||||
The weighted-average assumptions to determine the benefit obligation and net cost are as follows: | |||||||||
2014 | 2013 | ||||||||
Discount rate | 0.5 | % | 0.5 | % | |||||
Rate of increase in compensation levels | — | % | — | % | |||||
Components of Expense | |||||||||
Pension expense for the Benefit Plan is included in selling, general and administrative expenses in the Consolidated Statements of Operations and is comprised of the following for the years ended December 31 (in thousands): | |||||||||
2014 | 2013 | ||||||||
Service cost | $ | 88 | $ | 106 | |||||
Interest cost | 3 | 6 | |||||||
Amortization of transition obligation | 4 | 4 | |||||||
Gain | — | (4 | ) | ||||||
Special termination | 34 | — | |||||||
Prior service cost | (44 | ) | (48 | ) | |||||
Benefit adjustment | — | — | |||||||
Total pension expense | $ | 85 | $ | 64 | |||||
Estimated Benefits and Contributions | |||||||||
The Company expects to contribute approximately $66,000 to the Benefit Plan in 2015. As of December 31, 2014, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands): | |||||||||
2015 | $ | 66 | |||||||
2016 | 60 | ||||||||
2017 | 57 | ||||||||
2018 | 54 | ||||||||
2019 | 50 | ||||||||
Next five years | 293 | ||||||||
Total expected benefits to be paid | $ | 580 |
STOCK_OPTION_PLAN
STOCK OPTION PLAN | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
STOCK OPTION PLAN [Abstract] | |||||||||||||||||
STOCK OPTION PLAN | NOTE 11: STOCK OPTION PLAN | ||||||||||||||||
Summary of Stock Plan | |||||||||||||||||
The Company currently has one active stock-based compensation plan, which was approved by shareholders. The Company grants stock options to employees, consultants, and board members at the fair value of its common stock on the date of grant, with a term no greater than ten years. The majority of stock options vest over two or three years. Shareholders who own 10% or more of the Company’s outstanding stock are granted incentive stock options at an exercise price that may not be less than 110% of the fair market value of the Company’s common stock on the date of grant and have a term no greater than five years. | |||||||||||||||||
In February 2008, the Company’s Board of Directors approved the Mannatech, Incorporated 2008 Stock Incentive Plan (the “2008 Plan”), which reserves up to 1,000,000 shares of common stock for issuance of stock options and restricted stock to our employees, board members, and consultants, plus any shares reserved under the Company’s then-existing, unexpired stock plans for which options had not yet been issued, and any shares underlying outstanding options under the then-existing stock option plans that terminate without having been exercised in full. The 2008 Plan was approved by the Company’s shareholders at the 2008 Annual Shareholders’ Meeting. The 2008 Plan was approved by the Company’s shareholders at the 2008 Annual Shareholders’ Meeting and was amended at the 2012 Annual Shareholders’ Meeting held May 30, 2012 to increase the number of shares of common stock subject to the plan by 100,000 and amended again at the 2014 Annual Shareholder Meeting held May 28, 2014 to increase the number of shares of common stock subject to the plan by an additional 130,000. As of December 31, 2014, the 2008 Plan had 135,871 stock options available for grant before the plan expires on February 20, 2018. | |||||||||||||||||
A summary of changes in stock options outstanding during the year ended December 31, 2014, is as follows: | |||||||||||||||||
2014 | |||||||||||||||||
Numberof | Weighted | Weighted | Aggregate | ||||||||||||||
Options | average | average | intrinsic | ||||||||||||||
(in thousands) | exercise | remaining | value (in | ||||||||||||||
price | contractual life | thousands) | |||||||||||||||
(in years) | |||||||||||||||||
Outstanding at beginning of year | 188 | $ | 14.29 | ||||||||||||||
Granted | 95 | $ | 18.17 | ||||||||||||||
Exercised | (16 | ) | $ | 5.56 | |||||||||||||
Forfeited or expired | (18 | ) | $ | 9.14 | |||||||||||||
Outstanding at end of year | 249 | $ | 16.71 | 7.4 | 2,474 | ||||||||||||
Options exercisable at year end | 129 | $ | 19.46 | 6.1 | 4,138 | ||||||||||||
During 2014, the Company issued 16,164 new shares upon the exercise of options, and the Company granted 6,000 new shares to the Board. Options exercised during the year ending December 31, 2014 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price of less than $0.2 million. Options exercised during the year ending December 31, 2013 had a total intrinsic value of less than $0.2 million. Non-vested shares at December 31, 2014 and 2013 were 121,000 and 89,000, respectively. | |||||||||||||||||
Valuation and Expense Information Under FASB ASC Topic 718 Compensation – Stock Compensation | |||||||||||||||||
Under the provisions of FASB ASC Topic 718, the Company is required to measure and recognize compensation expense related to any outstanding and unvested stock options previously granted, and thereafter recognize, in its consolidated financial statements, compensation expense related to any new stock options granted after implementation using a calculated fair-value based option-pricing model. | |||||||||||||||||
The Company uses the Black-Scholes option-pricing model to calculate the fair value of all of its stock options and its assumptions are based on historical information. The following assumptions were used to calculate the compensation expense and the calculated fair value of stock options granted each year: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Dividend yield: | — | (1) | — | (1) | |||||||||||||
Risk-free interest rate: | 1.3 - 1.5 | % | 0.7 - 1.4 | % | |||||||||||||
Expected market price volatility: | 77.1 – 80.5 | % | 80.3 – 82.3 | % | |||||||||||||
Average expected life of stock options: | 4.5 years | 4.5 years | |||||||||||||||
(1) The Company declared no dividends in 2014 or 2013. | |||||||||||||||||
The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatilities of the Company’s stock. The expected life assumptions are based on the Company’s historical employee exercise and forfeiture behavior. | |||||||||||||||||
The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2014 and 2013 was $11.25 and $3.96 per share, respectively. The total fair value of shares vested during each of the years ended December 31, 2014 and 2013 was $0.1 million. | |||||||||||||||||
The Company recorded the following amounts related to the expense of the fair values of options during the years ended December 31, 2014 and 2013 (in thousands): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Selling, general and administrative expenses and income from operations before income taxes | $ | 512 | $ | 173 | |||||||||||||
Benefit for income taxes | (137 | ) | (33 | ) | |||||||||||||
Effect on net income | $ | 375 | $ | 140 | |||||||||||||
As of December 31, 2014, the Company had approximately $0.6 million of total unrecognized compensation expense related to stock options currently outstanding, to be recognized in future years, ending December 31, | |||||||||||||||||
as follows (in thousands): | |||||||||||||||||
Total gross unrecognized | Total tax benefit associated | Total net | |||||||||||||||
compensation expense | with unrecognized | unrecognized | |||||||||||||||
compensation expense | compensation expense | ||||||||||||||||
2015 | $ | 425 | $ | 82 | $ | 343 | |||||||||||
2016 | 225 | 18 | 207 | ||||||||||||||
2017 | 69 | — | 69 | ||||||||||||||
$ | 719 | $ | 100 | $ | 619 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||
COMMITMENTS AND CONTINGENCIES | NOTE 12: COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases | |||||
The Company leases certain office space, automobiles, computer hardware, and warehouse equipment under various non-cancelable operating leases. Some of these leases have renewal options. All of the Company’s leases expire at various times through August 2023. The Company also leases equipment under various month-to-month cancelable operating leases. For the years ended December 31, 2014 and 2013, total rent expense was approximately $3.9 million and $3.5 million, respectively. | |||||
Approximate future minimum rental commitments for non-cancelable operating leases (in thousands) are as follows: | |||||
Years ending December 31, | |||||
2015 | $ | 1,746 | |||
2016 | 1,348 | ||||
2017 | 1,168 | ||||
2018 | 552 | ||||
2019 | 15 | ||||
Thereafter | — | ||||
$ | 4,829 | ||||
Purchase Commitments | |||||
The Company maintains supply agreements with its suppliers and manufacturers. Some of the supply agreements contain exclusivity clauses and/or minimum annual purchase requirements. In March 2006, the Company entered into a ten-year supply agreement to purchase plant-derived mineral nutrition products from IHT Health Products, Inc. (f.k.a. InB:Biotechnologies, Inc.). As of December 31, 2014, the Company is required to purchase an aggregate of $5.8 million through 2016. | |||||
Royalty and Consulting Agreements | |||||
The Company utilizes royalty agreements with individuals and entities to provide compensation for items relating to developed products, websites and email provided to our associates. The Company paid royalties of $0.3 million in each of 2014 and 2013. | |||||
Employment Agreements | |||||
The Company has non-cancellable employment agreements with certain executives. If the employment relationships with these executives were terminated, as of December 31, 2014, the Company would continue to be indebted to the executives for $0.7 million, payable through 2015. |
LITIGATION
LITIGATION | 12 Months Ended |
Dec. 31, 2014 | |
LITIGATION [Abstract] | |
LITIGATION | NOTE 13: LITIGATION |
Employment Litigation | |
Natalie Clark v. Mannatech, Incorporated, Case No. DC-13-05038, 192nd Judicial District Court, Dallas County, Texas | |
On May 10, 2013, the Company was served notice of a lawsuit filed by Ms. Natalie Clark, a former executive with the Company, in the 192nd Judicial District Court, Dallas County, Texas (the “Court”) alleging discrimination and harassment based on gender. Ms. Clark alleged that she was stripped of her duties and wrongfully discharged as part of an alleged “purge of females in key positions” within the Company. Ms. Clark sought damages in excess of $1,000,000. The Court issued a standard mediation order; mediation was conducted on May 14, 2014. The parties reached a settlement of the dispute at mediation, and on June 11, 2014 the Company executed a Settlement Agreement with Ms. Clark, the terms of which are confidential. The Settlement Agreement is not an admission of wrongdoing by the Company, but is merely a good faith settlement of disputed and unresolved claims. The Company specifically denies and disclaims any liability to Ms. Clark and contends that her claims were without merit. On June 20, 2014, the Court issued an Agreed Order of Dismissal with Prejudice. The Company considers this matter closed. | |
Patent Litigation | |
Mannatech, Incorporated v. Wellness Quest, LLC and Harley Reginald McDaniel, Case No. 3:14-cv-2497, U.S. District Court, for the Northern District of Texas, Dallas Division | |
On July 11, 2014 the Company filed a patent infringement lawsuit against Wellness Quest, LLC and Dr. H. Reginald McDaniel (“Defendants”) alleging the Defendants infringe United States Patent Nos. 7,157,431 and 7,202,220, both entitled “Compositions of Plant Carbohydrates as Dietary Supplements,” (the “Patents”) and seeking to stop their manufacture, offer, and sale of infringing glyconutritional dietary supplement products. On July 16, 2014, the Company filed a Motion for Preliminary Injunction preventing Defendants from infringing the Patents pending a final decision on the merits. On August 29, 2014, the Defendants filed their Response to Plaintiff’s Motion for Preliminary Injunction and Brief in Support along with their Answer and Affirmative Defenses. On November 4, 2014, the Court denied the Company’s Motion for Preliminary Injunction and Motion to Expedite Discovery. On December 15, 2014, the Company deposed Dr. Reginald McDaniel. Each party has submitted its list of claim constructions/definitions and a list of the supporting authority. Each party has filed its opening brief and their respective responsive briefs. Defendants have designated an expert and the Company deposed the expert on January 27, 2015 regarding his claim construction opinions while reserving the right to examine him later regarding other matters. The parties remain engaged in the claim construction process. Mediation on this matter is scheduled for April 24, 2015. | |
This lawsuit continues the Company’s enforcement of its patent rights, and the Company intends to vigorously prosecute this matter. Based on the previous successful patent infringement lawsuits against Country Life, LLC, Glycobiotics International, Inc., Techmedica Health, Inc., IonX Holdings, Inc., Boston Mountain Laboratories, Inc., Green Life, LLC, and Xiong Lo, the Company believes there is a strong likelihood that it will obtain permanent injunctions against the manufacture and sale of any infringing products for the duration of the Company’s patents. This matter remains open. | |
Breach of Contract | |
Diana Anselmo and New Day Today Corporation v. Mannatech, Incorporated, Case No. DC-15-01904, ___ Judicial District Court, Dallas County, Texas | |
On February 18, 2015 Ms. Diana Anselmo and New Day Today Corporation (collectively, the “Plaintiffs”) filed suit against Mannatech alleging breach of contract pertaining to a portion of proceeds from a Mannatech Associate position once held by Ms. Anselmo’s former husband, Ray Gebauer. Plaintiffs are seeking damages in excess of $1,000,000 and a declaration that the Company continue to pay Plaintiffs proceeds from Mr. Gebauer’s former account. To date, Mannatech has not been formally served with notice of this lawsuit. | |
The Company has retained counsel and the Company's answer is due on March 23, 2015. It is not possible at this time to predict whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter. However, the Company believes it has a valid defense and will vigorously defend this claim. This matter will remain open until it is resolved. | |
Administrative Proceedings | |
On July 11, 2013, the Company was issued an assessment notice from the Busan Custom Office in Korea resulting from an audit covering fiscal years 2008 through 2012. Other expense for the year ended December 31, 2013 includes $1.0 million for this assessment, $0.2 million of which was accrued as of December 31, 2013 and paid in January 2014. | |
There are other ongoing audits in various international jurisdictions that the Company does not expect will have a material effect on our financial statements. | |
Litigation in General | |
The Company has incurred several claims in the normal course of business. The Company believes such claims can be resolved without any material adverse effect on its consolidated financial position, results of operations, or cash flows. | |
The Company maintains certain liability insurance; however, certain costs of defending lawsuits are not covered by or only partially covered by its insurance policies, including claims that are below insurance deductibles. Additionally, insurance carriers could refuse to cover certain claims, in whole or in part. The Company accrues costs to defend itself from litigation as they are incurred or as they become determinable. | |
The outcome of litigation is uncertain, and despite management’s views of the merits of any litigation, or the reasonableness of the Company’s estimates and reserves, the Company’s financial statements could nonetheless be materially affected by an adverse judgment. The Company believes it has adequately reserved for the contingencies arising from current legal matters where an outcome was deemed to be probable, and the loss amount could be reasonably estimated. |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | |||||||||||||
SHAREHOLDERS' EQUITY | NOTE 14: SHAREHOLDERS’ EQUITY | ||||||||||||
Preferred Stock | |||||||||||||
On May 19, 1998, the Company amended its Amended and Restated Articles of Incorporation to reduce the number of authorized shares of common stock from 100.0 million to 99.0 million and the Company authorized 1.0 million shares of preferred stock with a par value of $0.01 per share. No shares of preferred stock have ever been issued or outstanding. | |||||||||||||
Treasury Stock | |||||||||||||
On June 30, 2004, the Company’s Board of Directors authorized the Company to repurchase, in the open market, the lesser of (i) 131,756 shares of its common stock and (ii) $1.3 million of its shares, (the “June 2004 Plan”). On August 28, 2006, a second program permitting the Company to purchase, in the open market, up to $20 million of its outstanding shares was approved by our Board of Directors (the “August 2006 Plan”). On July 14, 2011, the Company’s Board of Directors authorized the Company to reactivate the June 2004 Plan. As of March 10, 2015, the maximum number of shares available for repurchase under the June 2004 Plan was 19,084, and the total number of shares purchased in the open market under the June 2004 Plan was 112,672. No shares have ever been purchased under the August 2006 Plan. The Company does not have any stock repurchase plans or programs other than the June 2004 Plan and the August 2006 Plan. | |||||||||||||
During 2014, due to the exercise of stock options, additional 16,164 shares were issued from Treasury for exercises. Also, 6,000 shares were issued from Treasury on December 4, 2014 when the Board granted those shares to members of the Board as compensation for their work on the Board. | |||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||
Accumulated other comprehensive loss, net, displayed in the Consolidated Statement of Shareholders’ Equity represents the results of certain shareholders’ equity changes not reflected in the consolidated statements of operations, such as foreign currency translation and certain pension and postretirement benefit obligations. | |||||||||||||
The after-tax components of accumulated other comprehensive loss, are as follows (in thousands): | |||||||||||||
Foreign | Pension | Accumulated | |||||||||||
Currency | Postretirement | Other | |||||||||||
Translation | Benefit | Comprehensive | |||||||||||
Obligation | Loss, Net | ||||||||||||
Balance as of December 31, 2013 | $ | (1,110 | ) | $ | 367 | $ | (743 | ) | |||||
Current-period change before reclassifications | 653 | — | 653 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | (30 | ) | (30 | ) | ||||||||
Income tax provision | — | 11 | 11 | ||||||||||
Balance as of December 31, 2014 | $ | (457 | ) | $ | 348 | $ | (109 | ) |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2014 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 15: EARNINGS PER SHARE |
The Company calculates basic Earnings per Share (EPS) by dividing net income by the weighted-average number of common shares outstanding for the period. The diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards under the 2008 Stock Incentive Plan. In determining potential dilution effect of outstanding stock options during 2014 and 2013, the Company used average common stock close price of $16.66 and $14.32, per share, respectively. Approximately 0.1 million of the Company’s stock options were excluded from the diluted EPS calculation for each of 2014 and 2013 as the effect would have been antidilutive. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||
SEGMENT INFORMATION | NOTE 16: SEGMENT INFORMATION | ||||||||||||||||
The Company conducts its business as a single operating segment, consolidating all of its business units into a single reportable entity, as a seller of proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products through its network marketing distribution channels operating in twenty-four countries. Each of the Company’s business units sells similar packs and products and possesses similar economic characteristics, such as selling prices and gross margins. In each country, the Company markets its products and pays commissions and incentives in similar market environments. The Company’s management reviews its financial information by country and focuses its internal reporting and analysis of revenues by packs and product sales. The Company sells its products through its independent associates and distributes its products through similar distribution channels in each country. No single independent associate has ever accounted for more than 10% of the Company’s consolidated net sales. | |||||||||||||||||
The Company operates facilities in ten countries and sells product in twenty-four countries around the world. These facilities are located in the United States, Canada, Switzerland, Australia, the United Kingdom, Japan, the Republic of Korea (South Korea), Taiwan, South Africa and Mexico. Each facility services different geographic areas. We currently sell our products in three regions: (i) North America (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); (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan and Hong Kong). | |||||||||||||||||
Consolidated net sales shipped to customers in these regions, along with pack and product information for the years ended December 31, are as follows (in millions, except percentages): | |||||||||||||||||
Region | 2014 | 2013 | |||||||||||||||
North America | $ | 80.8 | 42.5 | % | $ | 82.2 | 46.3 | % | |||||||||
Asia/Pacific | 92.4 | 48.6 | % | 80.3 | 45.3 | % | |||||||||||
EMEA | 16.9 | 8.9 | % | 14.9 | 8.4 | % | |||||||||||
Total | $ | 190.1 | 100 | % | $ | 177.4 | 100 | % | |||||||||
2014 | 2013 | ||||||||||||||||
Consolidated product sales | $ | 155.3 | $ | 143.5 | |||||||||||||
Consolidated pack sales | 27.8 | 26.2 | |||||||||||||||
Consolidated other, including freight | 7 | 7.7 | |||||||||||||||
Total | $ | 190.1 | $ | 177.4 | |||||||||||||
Long-lived assets by region, which include property and equipment and construction in progress for the Company and its subsidiaries, as of December 31, reside in the following regions, as follows (in millions): | |||||||||||||||||
Region | 2014 | 2013 | |||||||||||||||
North America | $ | 3.1 | $ | 2.4 | |||||||||||||
Asia/Pacific | 0.8 | 0.4 | |||||||||||||||
EMEA | 0.2 | 0.4 | |||||||||||||||
Total | $ | 4.1 | $ | 3.2 | |||||||||||||
Inventory balances by region, which consist of raw materials, and finished goods, including promotional materials, and offset by obsolete inventories, for the Company and its subsidiaries, reside in the following regions as of December 31, as follows (in millions): | |||||||||||||||||
Region | 2014 | 2013 | |||||||||||||||
North America | $ | 4 | $ | 6.4 | |||||||||||||
Asia/Pacific | 4.3 | 5.3 | |||||||||||||||
EMEA | 2.3 | 2.3 | |||||||||||||||
Total | $ | 10.6 | $ | 14 |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS [Abstract] | |||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | MANNATECH, INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||||
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Additions | |||||||||||||||||||||
Balance at | Charged to | Charged to | Deductions | Balance at | |||||||||||||||||
Beginning of Year | Costs and | other | End of Year | ||||||||||||||||||
Expenses | Accounts | ||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 20 | 178 | — | (56 | ) | $ | 142 | |||||||||||||
Allowance for obsolete inventories | $ | 1,619 | 1,229 | — | (839 | ) | $ | 2,009 | |||||||||||||
Valuation allowance for deferred tax assets | $ | 8,519 | 612 | — | (3,867 | ) | $ | 5,264 | |||||||||||||
Included in accrued expenses: | |||||||||||||||||||||
Reserve for sales returns | $ | 156 | 1,371 | — | (1,289 | ) | $ | 238 | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 142 | 579 | — | (508 | ) | $ | 213 | |||||||||||||
Allowance for obsolete inventories | $ | 2,009 | 2,124 | — | (1,991 | ) | $ | 2,142 | |||||||||||||
Valuation allowance for deferred tax assets | $ | 5,264 | 5,344 | — | (863 | ) | $ | 9,745 | |||||||||||||
Included in accrued expenses: | |||||||||||||||||||||
Reserve for sales returns | $ | 238 | 1,628 | — | (1,659 | ) | $ | 207 |
ORGANIZATION_AND_SUMMARY_OF_SI1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||||||
The consolidated financial statements and footnotes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||
Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation. | |||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||
The preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles requires the use of estimates that affect the reported value of assets, liabilities, revenues and expenses. These estimates are based on historical experience and various other factors. The Company continually evaluates the information used to make these estimates as the business and economic environment changes. Historically, actual results have not varied materially from the Company’s estimates and the Company does not currently anticipate a significant change in its assumptions related to these estimates. However, actual results may differ from these estimates under different assumptions or conditions. | |||||||||||||||||
The use of estimates is pervasive throughout the consolidated financial statements, but the accounting policies and estimates considered the most significant are described in this note to the consolidated financial statements, Organization and Summary of Significant Accounting Policies. | |||||||||||||||||
Foreign Currency Translation | Foreign Currency Translation | ||||||||||||||||
The United States dollar is the functional currency for the majority of the Company’s foreign subsidiaries. As a result, nonmonetary assets and liabilities are translated at their approximate historical rates, monetary assets and liabilities are translated at exchange rates in effect at the end of the year, and revenues and expenses are translated at weighted-average exchange rates for the year. Transaction losses totaled approximately ($3.0) million and ($0.9) million, for the years ended December 31, 2014 and 2013, respectively, and are included in other expense, net in the Company’s Consolidated Statements of Operations. | |||||||||||||||||
The local currency is the functional currency of our subsidiaries in Japan, Republic of Korea, Taiwan, Norway, Sweden, and Mexico. These subsidiaries’ assets and liabilities are translated into the United States dollars at exchange rates existing at the balance sheet dates, revenues and expenses are translated at weighted-average exchange rates, and shareholders’ equity and intercompany balances are translated at historical exchange rates. The foreign currency translation adjustment is recorded as a separate component of shareholders’ equity and is included in accumulated other comprehensive loss. | |||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company includes in its cash and cash equivalents credit card receivables due from its credit card processor, as the cash proceeds from credit card receivables are received within 24 to 72 hours. As of December 31, 2014 and 2013, credit card receivables were $1.2 million and $0.6 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $24.8 million and $14.7 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest bearing deposits. The Company also holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk. | |||||||||||||||||
Restricted Cash | Restricted Cash | ||||||||||||||||
The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) Australia building lease collateral. As of December 31, 2014 and 2013, our total restricted cash was $8.6 million and $5.8 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 December 31, 2014 and 2013, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. At December 31, 2014 and 2013, the Company held an allowance for doubtful accounts of $0.2 million and $0.1 million, respectively. Included in accounts receivable at December 31, 2014 and 2013 is a $0.2 million and $0.1 million receivable, net, from an independent associate. | |||||||||||||||||
Inventories | Inventories | ||||||||||||||||
Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or market. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. | |||||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||
Property and equipment are stated at cost, less accumulated depreciation and amortization computed using the straight-line method over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Expenditures for maintenance and repairs are charged to expense as incurred. The cost of property and equipment sold or otherwise retired and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in other operating costs in the accompanying Consolidated Statements of Operations. The estimated useful lives of fixed assets are as follows: | |||||||||||||||||
Estimated useful life | |||||||||||||||||
Office furniture and equipment | 5 to 7 years | ||||||||||||||||
Computer hardware and software | 3 to 5 years | ||||||||||||||||
Automobiles | 3 to 5 years | ||||||||||||||||
Leasehold improvements(1) | 2 to 10 years | ||||||||||||||||
(1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. | |||||||||||||||||
Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes a comparison of future projected cash flows generated by the asset or group of assets with its associated net carrying value. If the net carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value. We determined that no impairment indicators existed during the years ended December 31, 2014 and 2013. | |||||||||||||||||
Other Assets | Other Assets | ||||||||||||||||
At each of December 31, 2014 and 2013, other assets were $3.6 million. Included in the December 31, 2014 and 2013 balances were deposits for building leases in various locations of $1.5 million and $1.4 million, respectively. Also included in the December 31, 2014 and 2013 balances were $1.7 million and $1.8 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages. Other assets at each of December 31, 2014 and 2013 also include $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. | |||||||||||||||||
Other Long-Term Liabilities | Other Long-Term Liabilities | ||||||||||||||||
Other long-term liabilities were $2.1 million for each of the years ending December 31, 2014 and 2013. Included in the December 31, 2013 balance were long-term financing obligations of $0.2 million. At each of December 31, 2014 and 2013, we recorded $0.7 million in other long-term liabilities related to uncertain income tax positions (see Note 8, Income Taxes). Certain operating leases for the Company’s regional office facilities contain a restoration clause that requires the Company to restore the premises to its original condition. At December 31, 2014 and 2013, accrued restoration costs related to these leases amounted to $0.4 million and $0.2 million, respectively. At each of December 31, 2014 and 2013, the Company also recorded a long-term liability for an estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations of $0.6 million (See Note 10, Employee Benefit Plans). | |||||||||||||||||
Revenue Recognition and Deferred Commissions | Revenue Recognition and Deferred Commissions | ||||||||||||||||
The Company’s revenue is derived from sales of individual products, sales of its starter and renewal packs, and shipping fees. Substantially all of the Company’s product and pack sales are made to associates at published wholesale prices and to members at discounted published retail prices. The Company records revenue net of any sales taxes and records a reserve for expected sales returns based on its historical experience. | |||||||||||||||||
The Company recognizes revenue from shipped packs and products upon receipt by the customer. Corporate-sponsored event revenue is recognized when the event is held. The Company defers certain components of its revenue. At December 31, 2014 and December 31, 2013, the Company’s deferred revenue was $10.9 million and $6.4 million, respectively. During the third quarter of 2013, the Company started a loyalty program through which customers earn loyalty points from qualified automatic orders, which can be applied to future purchases. The Company defers the dollar equivalent in revenue of these points until the points are applied or forfeited, which includes an estimate of the percentage of the unvested loyalty points that are expected to be forfeited. During the third quarter 2014, the Company modified the program to allow loyalty points to vest more quickly. The deferred revenue associated with the loyalty program at December 31, 2014 and December 31, 2013 was $9.7 million and $5.5 million, respectively. Deferred revenue consisted primarily of: (i) sales of packs and products shipped but not received by the customers by the end of the respective period; (ii) revenue from the loyalty program; and (iii) prepaid registration fees from customers planning to attend a future corporate-sponsored event. In total current assets, the Company defers commissions on (i) the sales of packs and products shipped but not received by the customers by the end of the respective period and (ii) the loyalty program. Deferred commissions were $4.5 million and $2.7 million at December 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||
Loyalty program | (in thousands) | ||||||||||||||||
Loyalty deferred revenue as of June 30, 2013 | $ | — | |||||||||||||||
Loyalty points forfeited | (1,136 | ) | |||||||||||||||
Loyalty points used | (723 | ) | |||||||||||||||
Loyalty points vested | 5,072 | ||||||||||||||||
Loyalty points unvested | 2,243 | ||||||||||||||||
Loyalty deferred revenue as of December 31, 2013 | $ | 5,456 | |||||||||||||||
Loyalty deferred revenue as of January 1, 2014 | $ | 5,456 | |||||||||||||||
Loyalty points forfeited | (4,664 | ) | |||||||||||||||
Loyalty points used | (12,348 | ) | |||||||||||||||
Loyalty points vested | 19,580 | ||||||||||||||||
Loyalty points unvested | 1,679 | ||||||||||||||||
Loyalty deferred revenue as of December 31, 2014 | $ | 9,703 | |||||||||||||||
We estimate a sales return reserve for expected sales refunds based on our historical experience over a rolling six-month period. If actual results differ from our estimated sales return reserve due to various factors, the amount of revenue recorded for each period could be materially affected. Historically, our sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale. Sales returns have historically averaged 1.5% or less of our gross sales. For the year ended December 31, 2014 our sales return reserve consisted of the following (in thousands): | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
Sales reserve as of January 1, 2014 | $ | 238 | |||||||||||||||
Provision related to sales made in current period | 1,618 | ||||||||||||||||
Adjustment related to sales made in prior periods | 10 | ||||||||||||||||
Actual returns or credits related to current period | (1,411 | ) | |||||||||||||||
Actual returns or credits related to prior periods | (248 | ) | |||||||||||||||
Sales reserve as of December 31, 2014 | $ | 207 | |||||||||||||||
Shipping and Handling Costs | Shipping and Handling Costs | ||||||||||||||||
The Company records freight and shipping fees collected from its customers as revenue. The Company records inbound freight as a component of inventory and cost of sales. Total revenue from freight and shipping fees were approximately $7.4 million and $7.7 million for the years ended December 31, 2014 and 2013, respectively. Total freight costs for shipping products to our customers included in cost of sales were approximately $6.7 million and $6.8 million for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||
Commission and Incentive Expenses | Commission and Incentive Expenses | ||||||||||||||||
Associates earn commissions and incentives based on their direct and indirect commissionable net sales over 13 business periods. Each business period equals 28 days. The Company accrues commissions and incentives when earned by associates and pays commissions on product sales three weeks following the business period end and pays commissions on its pack sales five weeks following the business period end. | |||||||||||||||||
Advertising Expenses | Advertising Expenses | ||||||||||||||||
The Company expenses advertising and promotions in selling and administrative expenses when incurred. Advertising and promotional expenses were approximately $4.9 million and $4.3 million, for the years ended December 31, 2014 and 2013, respectively. Educational and promotional items, called sales aids, are sold to associates to assist in their sales efforts and are included in inventories and charged to cost of sales when sold. | |||||||||||||||||
Research and Development Expenses | Research and Development Expenses | ||||||||||||||||
The Company expenses research and development expenses as incurred. Research and development expenses related to new product development, enhancement of existing products, clinical studies and trials, Food and Drug Administration compliance studies, general supplies, internal salaries, third-party contractors, and consulting fees were approximately $1.6 million for the years ended December 31, 2014 and 2013. Salaries and contract labor are included in selling and administrative expenses and all other research and development costs are included in other operating costs. | |||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||||||
The Company currently has one active stock-based compensation plan, which was approved by its shareholders at its 2008 Annual Shareholder’s meeting held on June 18, 2008 and amended at the 2010, 2012, and 2014 Annual Shareholder meetings. The Company grants stock options to its employees, consultants, and board members with an exercise price equal to the closing price of its common stock on the date of grant with a term no greater than 10 years. The majority of stock options vest over two or three years. Incentive stock options granted to shareholders who own 10% or more of the Company’s outstanding stock are granted at an exercise price that may not be less than 110% of the closing price of the Company’s common stock on the date of grant and have a term no greater than five years. At the date of grant, the Company determines the fair value of the stock option award and recognizes compensation expense over the requisite service period, or the vesting period of the award. The fair value of the stock option award is calculated using the Black-Scholes option-pricing model. The Company records stock-based compensation expense in selling and administrative expenses. | |||||||||||||||||
Software Development Costs | Software Development Costs | ||||||||||||||||
The Company capitalizes qualifying internal payroll and external contracting and consulting costs related to the development of internal use software that are incurred during the application development stage, which includes design of the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project along with post-implementation stages of internal use software are expensed as incurred. The Company amortizes such costs over the estimated useful life of the software, which is three to five years once the software is placed in service. | |||||||||||||||||
Other Operating Costs | Other Operating Costs | ||||||||||||||||
Other operating costs include travel, accounting/legal/consulting fees, credit card processing fees, banking fees, off-site storage fees, utilities, and other miscellaneous operating expenses. | |||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
The Company determines the provision for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. The Company evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance for the portion of any deferred tax assets where the likelihood of realizing an income tax benefit in the future does not meet the more likely than not criterion for recognition. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. | |||||||||||||||||
Comprehensive Income and Accumulated Other Comprehensive Loss | Comprehensive Income and Accumulated Other Comprehensive Loss | ||||||||||||||||
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Norway, Sweden and Mexico operations, and changes in the pension obligation for its Japanese employees. | |||||||||||||||||
Concentration Risk | Concentration Risk | ||||||||||||||||
A significant portion of our revenue is derived from three product lines: Ūth TM Skin Rejuvenation, NutiVerus, and our core Ambrotose® complex products, which include the Ambrotose® products and Advanced Ambrotose® products. A decline in sales value of such products could have a material adverse effect on our earnings, cash flows, and financial position. Revenue from these products were as follows for the years ended December 31, 2014 and 2013 (in thousands, except percentages): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Sales by | % of total | Sales by | % of total | ||||||||||||||
product | net sales | product | net sales | ||||||||||||||
Advanced Ambrotose® | $ | 63,791 | 33.6 | % | $ | 59,894 | 33.7 | % | |||||||||
Ambrotose® | 10,895 | 5.7 | % | 10,939 | 6.2 | % | |||||||||||
Ūth TM Skin Rejuvenation | 13,431 | 7.1 | % | 2,406 | 1.4 | % | |||||||||||
NutriVerus | 10,530 | 5.5 | % | 10,964 | 6.2 | % | |||||||||||
Total | $ | 98,647 | 51.9 | % | $ | 84,203 | 47.5 | % | |||||||||
Our business is not currently exposed to customer concentration risk given that no independent associate has ever accounted for more than 10% of our consolidated net sales. | |||||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, investments, receivables, and restricted cash. The Company utilizes financial institutions that the Company considers to be of high credit quality and periodically evaluates the credit rating of such institutions and the allocation of their investments to minimize exposure to credit concentration risk. | |||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||
The fair value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, time deposits, money market investments, receivables, payables, and accrued expenses, approximate their carrying values due to their relatively short maturities. See Note 3 to our Consolidated Financial Statements, Fair Value, for more information. |
ORGANIZATION_AND_SUMMARY_OF_SI2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Estimated useful lives of fixed assets | The estimated useful lives of fixed assets are as follows: | ||||||||||||||||
Estimated useful life | |||||||||||||||||
Office furniture and equipment | 5 to 7 years | ||||||||||||||||
Computer hardware and software | 3 to 5 years | ||||||||||||||||
Automobiles | 3 to 5 years | ||||||||||||||||
Leasehold improvements(1) | 2 to 10 years | ||||||||||||||||
(1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. | |||||||||||||||||
Loyalty deferred revenue | Deferred commissions were $4.5 million and $2.7 million at December 31, 2014 and December 31, 2013, respectively. | ||||||||||||||||
Loyalty program | (in thousands) | ||||||||||||||||
Loyalty deferred revenue as of June 30, 2013 | $ | — | |||||||||||||||
Loyalty points forfeited | (1,136 | ) | |||||||||||||||
Loyalty points used | (723 | ) | |||||||||||||||
Loyalty points vested | 5,072 | ||||||||||||||||
Loyalty points unvested | 2,243 | ||||||||||||||||
Loyalty deferred revenue as of December 31, 2013 | $ | 5,456 | |||||||||||||||
Loyalty deferred revenue as of January 1, 2014 | $ | 5,456 | |||||||||||||||
Loyalty points forfeited | (4,664 | ) | |||||||||||||||
Loyalty points used | (12,348 | ) | |||||||||||||||
Loyalty points vested | 19,580 | ||||||||||||||||
Loyalty points unvested | 1,679 | ||||||||||||||||
Loyalty deferred revenue as of December 31, 2014 | $ | 9,703 | |||||||||||||||
Sales return reserve | For the year ended December 31, 2014 our sales return reserve consisted of the following (in thousands): | ||||||||||||||||
31-Dec-14 | |||||||||||||||||
Sales reserve as of January 1, 2014 | $ | 238 | |||||||||||||||
Provision related to sales made in current period | 1,618 | ||||||||||||||||
Adjustment related to sales made in prior periods | 10 | ||||||||||||||||
Actual returns or credits related to current period | (1,411 | ) | |||||||||||||||
Actual returns or credits related to prior periods | (248 | ) | |||||||||||||||
Sales reserve as of December 31, 2014 | $ | 207 | |||||||||||||||
Concentration risk | Revenue from these products were as follows for the years ended December 31, 2014 and 2013 (in thousands, except percentages): | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Sales by | % of total | Sales by | % of total | ||||||||||||||
product | net sales | product | net sales | ||||||||||||||
Advanced Ambrotose® | $ | 63,791 | 33.6 | % | $ | 59,894 | 33.7 | % | |||||||||
Ambrotose® | 10,895 | 5.7 | % | 10,939 | 6.2 | % | |||||||||||
Ūth TM Skin Rejuvenation | 13,431 | 7.1 | % | 2,406 | 1.4 | % | |||||||||||
NutriVerus | 10,530 | 5.5 | % | 10,964 | 6.2 | % | |||||||||||
Total | $ | 98,647 | 51.9 | % | $ | 84,203 | 47.5 | % |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
FAIR VALUE [Abstract] | |||||||||||||||||
Fair value, assets measured on recurring basis | The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at December 31, 2014 and 2013. | ||||||||||||||||
2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money Market Funds – Fidelity, US | $ | 392 | $ | — | $ | — | $ | 392 | |||||||||
Interest bearing deposits – various banks | 12,322 | — | — | 12,322 | |||||||||||||
Total | $ | 12,714 | $ | — | $ | — | $ | 12,714 | |||||||||
Amounts included in: | |||||||||||||||||
Cash and cash equivalents | $ | 6,159 | $ | — | $ | — | $ | 6,159 | |||||||||
Restricted Cash | 738 | — | — | 738 | |||||||||||||
Long-term restricted cash | 5,817 | — | — | 5,817 | |||||||||||||
Total | $ | 12,714 | $ | — | $ | — | $ | 12,714 | |||||||||
2013 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money Market Funds – Fidelity, US | $ | 192 | $ | — | $ | — | $ | 192 | |||||||||
Interest bearing deposits – various banks | 6,803 | — | — | 6,803 | |||||||||||||
Total | $ | 6,995 | $ | — | $ | — | $ | 6,995 | |||||||||
Amounts included in: | |||||||||||||||||
Cash and cash equivalents | $ | 3,044 | $ | — | $ | — | $ | 3,044 | |||||||||
Restricted Cash | 329 | — | — | 329 | |||||||||||||
Long-term restricted cash | 3,622 | — | — | 3,622 | |||||||||||||
Total | $ | 6,995 | $ | — | $ | — | $ | 6,995 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORIES [Abstract] | |||||||||
Inventories | Inventories as of December 31, 2014 and 2013, consisted of the following (in thousands): | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 2,118 | $ | 4,396 | |||||
Finished goods | 10,615 | 11,601 | |||||||
Inventory reserves for obsolescence | (2,142 | ) | (2,009 | ) | |||||
Total | $ | 10,591 | $ | 13,988 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY AND EQUIPMENT [Abstract] | |||||||||
Property and equipment | As of December 31, 2014 and 2013, property and equipment consisted of the following (in thousands): | ||||||||
2014 | 2013 | ||||||||
Office furniture and equipment | $ | 8,666 | $ | 8,797 | |||||
Computer hardware | 7,738 | 7,779 | |||||||
Computer software | 46,791 | 46,535 | |||||||
Automobiles | 81 | 111 | |||||||
Leasehold improvements | 12,270 | 11,920 | |||||||
75,546 | 75,142 | ||||||||
Less accumulated depreciation and amortization | (73,065 | ) | (71,972 | ) | |||||
Property and equipment, net | 2,481 | 3,170 | |||||||
Construction in progress | 1,622 | 69 | |||||||
Total | $ | 4,103 | $ | 3,239 |
CAPITAL_LEASE_OBLIGATIONS_Tabl
CAPITAL LEASE OBLIGATIONS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
CAPITAL LEASE OBLIGATIONS [Abstract] | |||||
Future minimum lease payments | The future minimum lease payments (in thousands) are as follows: | ||||
2015 | $ | 967 | |||
2016 | 444 | ||||
2017 | 319 | ||||
2018 | 133 | ||||
2019 | — | ||||
Total future minimum lease payments | 1,863 | ||||
Less: Amounts representing interest (effective interest rate 6.1%) | (110 | ) | |||
Present value of minimum lease payments | 1,753 | ||||
Current portion of capital lease obligations | (901 | ) | |||
Long-term portion of capital lease obligations | $ | 852 |
ACCRUED_EXPENSES_Tables
ACCRUED EXPENSES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
ACCRUED EXPENSES [Abstract] | |||||||||
Accrued expenses | As of December 31, 2014 and 2013, accrued expenses consisted of the following (in thousands): | ||||||||
2014 | 2013 | ||||||||
Accrued asset purchases | $ | 291 | $ | 75 | |||||
Accrued compensation | 2,180 | 1,964 | |||||||
Accrued royalties | 105 | 104 | |||||||
Accrued sales and other taxes | 1,193 | 170 | |||||||
Other accrued operating expenses (1) | 786 | 962 | |||||||
Customer deposits and sales returns | 211 | 243 | |||||||
Accrued travel expenses related to corporate events | 107 | 303 | |||||||
Accrued shipping and handling costs | 344 | 812 | |||||||
Rent expense | 147 | 150 | |||||||
Accrued legal and accounting fees | 992 | 1,013 | |||||||
$ | 6,356 | $ | 5,796 | ||||||
-1 | 2013 balance includes $190 for the Korea Busan Custom Office assessment, resulting from an audit covering fiscal years 2008 through 2012, which was paid in January 2014. |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
Income (loss) before income taxes | The components of the Company’s income before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands): | ||||||||||||
2014 | 2013 | ||||||||||||
United States | $ | 2,044 | $ | 702 | |||||||||
Foreign | 7,777 | 2,107 | |||||||||||
$ | 9,821 | $ | 2,809 | ||||||||||
Income tax provision (benefit) | The components of the Company’s income tax provision (benefit) for the years ended December 31 are as follows (in thousands): | ||||||||||||
Current provision: | 2014 | 2013 | |||||||||||
Federal | $ | 2,433 | $ | 124 | |||||||||
State | 43 | 144 | |||||||||||
Foreign | 2,547 | 1,434 | |||||||||||
5,023 | 1,702 | ||||||||||||
Deferred provision (benefit): | |||||||||||||
Federal | (1,792 | ) | (1,883 | ) | |||||||||
State | 349 | — | |||||||||||
Foreign | (255 | ) | (184 | ) | |||||||||
(1,698 | ) | (2,067 | ) | ||||||||||
$ | 3,325 | $ | (365 | ) | |||||||||
Reconciliation of effective income tax rate and United States federal statutory income tax rate | A reconciliation of the Company’s effective income tax rate and the United States federal statutory income tax rate is summarized as follows, for the years ended December 31: | ||||||||||||
2014 | 2013 | ||||||||||||
Federal statutory income taxes | 35 | % | 35 | % | |||||||||
State income taxes, net of federal benefit | 3.5 | 1.3 | |||||||||||
Difference in foreign and United States tax on foreign operations | (16.1 | ) | (11.6 | ) | |||||||||
Effect of changes in valuation allowance for net operating loss carryforwards | 14.3 | (55.9 | ) | ||||||||||
Effect of change in uncertain tax positions (net) | 0.5 | (17.0 | ) | ||||||||||
Federal Sub-Part F Income from foreign operations | 2.9 | 11.8 | |||||||||||
Other | (6.2 | ) | 23.4 | ||||||||||
33.9 | % | (13.0 | )% | ||||||||||
Deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities consisted of the following at December 31 (in thousands): | ||||||||||||
Deferred tax assets: | 2014 | 2013 | |||||||||||
Current: | |||||||||||||
Deferred revenue | $ | 453 | $ | (26 | ) | ||||||||
Inventory capitalization | 171 | 228 | |||||||||||
Inventory reserves | 762 | 644 | |||||||||||
Accrued expenses | 697 | 917 | |||||||||||
Other | 127 | 108 | |||||||||||
Total current deferred tax assets | 2,210 | 1,871 | |||||||||||
Noncurrent: | |||||||||||||
Depreciation and amortization | 1,867 | 1,834 | |||||||||||
Net operating loss(1) | 5,842 | 5,078 | |||||||||||
Deferred royalty | 28 | 39 | |||||||||||
Non-cash accounting charges related to stock options and warrants | 628 | 520 | |||||||||||
Accrued expenses | 350 | 366 | |||||||||||
Foreign tax credit carryover | 3,855 | — | |||||||||||
Other | 506 | 843 | |||||||||||
Total noncurrent deferred tax assets | 13,076 | 8,680 | |||||||||||
Total deferred tax assets | 15,286 | 10,551 | |||||||||||
Valuation allowance | (9,745 | ) | (5,264 | ) | |||||||||
Total deferred tax assets, net of valuation allowance | $ | 5,541 | $ | 5,287 | |||||||||
Deferred tax liabilities: | |||||||||||||
Current: | |||||||||||||
Prepaid expenses | $ | 413 | $ | 396 | |||||||||
Deferred Commissions | 769 | 5 | |||||||||||
Other | 10 | — | |||||||||||
Total current deferred tax liabilities | 1,192 | 401 | |||||||||||
Noncurrent: | |||||||||||||
Internally-developed software | 11 | 15 | |||||||||||
Depreciation and amortization | 2 | 2 | |||||||||||
Sub-Part F Income Deferred | — | 2,163 | |||||||||||
Other | 24 | (52 | ) | ||||||||||
Total noncurrent deferred tax liabilities | 37 | 2,128 | |||||||||||
Total deferred tax liabilities | $ | 1,229 | $ | 2,529 | |||||||||
(1) The Company’s net operating loss will expire as follows (dollar amounts in thousands): | |||||||||||||
Jurisdiction | Gross NOL | Tax Effected NOL | Expiration Years | ||||||||||
Canada | $ | — | — | 2043 | |||||||||
Cyprus | 5 | 1 | 2019 | ||||||||||
Denmark | 1 | — | Indefinite | ||||||||||
Mexico | 9,000 | 2,700 | 2020-2023 | ||||||||||
Norway | 448 | 121 | Indefinite | ||||||||||
Singapore | 28 | 5 | Indefinite | ||||||||||
Sweden | 541 | 119 | Indefinite | ||||||||||
Switzerland | 13,612 | 1,234 | 2016-2020 | ||||||||||
Taiwan | 7,152 | 1,215 | 2016-2023 | ||||||||||
Ukraine | 678 | 122 | Indefinite | ||||||||||
United States (states) | 12,996 | 325 | 2015-2032 | ||||||||||
Summary of valuation allowance | The valuation allowances presented below (in millions) at December 31, 2014 and 2013, represented a reserve against the Company’s net deferred tax asset the Company believed the “more likely than not” criterion for recognition purposes could not be met. The U.S. valuation allowance increased due to the carryover of foreign tax credits that we do not anticipate to utilize in future years. | ||||||||||||
Country | 2014 | 2013 | |||||||||||
Mexico | $ | 2.7 | $ | 2.7 | |||||||||
Norway | 0.1 | 0.2 | |||||||||||
Sweden | 0.1 | 0.1 | |||||||||||
Switzerland | 1.2 | 0.2 | |||||||||||
Taiwan | 1.2 | 1.2 | |||||||||||
Ukraine | 0.1 | 0.1 | |||||||||||
United States | 4.3 | 0.8 | |||||||||||
Total | $ | 9.7 | $ | 5.3 | |||||||||
Deferred tax assets (liabilities) classified in Consolidated Balance Sheets | Deferred tax assets (liabilities) are classified in the accompanying Consolidated Balance Sheets of December 31 as follows (in thousands): | ||||||||||||
2014 | 2013 | ||||||||||||
Current deferred tax assets | $ | 1,141 | $ | 1,578 | |||||||||
Noncurrent deferred tax assets | 3,320 | 1,303 | |||||||||||
Current deferred tax liabilities | (123 | ) | (114 | ) | |||||||||
Other long-term liabilities | (26 | ) | (9 | ) | |||||||||
Net deferred tax assets | $ | 4,312 | $ | 2,758 | |||||||||
Unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows, for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||
2014 | 2013 | ||||||||||||
Balance as of January 1 | $ | 738 | $ | 3,039 | |||||||||
Additions for tax positions related to the current year | 1 | 436 | |||||||||||
Additions for tax positions of prior years | 111 | 292 | |||||||||||
Reductions of tax positions of prior years | (47 | ) | (3,029 | ) | |||||||||
Balance as of December 31 | $ | 803 | $ | 738 | |||||||||
Tax years subject to examinations | As of December 31, 2014, the tax years that remained subject to examination by a major tax jurisdiction for the Company’s most significant subsidiaries were as follows: | ||||||||||||
Jurisdiction | Open Years | ||||||||||||
Australia | 2010-2014 | ||||||||||||
Canada | 2010-2014 | ||||||||||||
Denmark | 2011-2014 | ||||||||||||
Japan | 2011-2014 | ||||||||||||
Mexico | 2010-2014 | ||||||||||||
Norway | 2008-2014 | ||||||||||||
Republic of Korea | 2009-2014 | ||||||||||||
Singapore | 2010-2014 | ||||||||||||
South Africa | 2011-2014 | ||||||||||||
Sweden | 2009-2014 | ||||||||||||
Switzerland | 2009-2014 | ||||||||||||
Taiwan | 2009-2014 | ||||||||||||
United Kingdom | 2008-2014 | ||||||||||||
United States | 2008-2014 |
TRANSACTIONS_WITH_RELATED_PART1
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES [Abstract] | |||||||||
Related party transactions | The Company has made cash donations and sold products to MannaRelief as follows: | ||||||||
2014 | 2013 | ||||||||
Sold Products | $ | 0.3million | $ | 0.2million | |||||
Contributed Cash Donations | $ | 0.3million | $ | 0.9million |
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
EMPLOYEE BENEFIT PLANS [Abstract] | |||||||||
Benefit Plan's projected benefit obligation and valuation of plan assets | The Benefit Plan’s projected benefit obligation and valuation of plan assets were as follows for the years ended December 31 (in thousands): | ||||||||
Projected benefit obligation: | 2014 | 2013 | |||||||
Balance, beginning of year | $ | 629 | $ | 714 | |||||
Service cost | 88 | 106 | |||||||
Interest cost | 3 | 6 | |||||||
Liability losses | (6 | ) | 59 | ||||||
Benefits paid to participants | (122 | ) | (121 | ) | |||||
Special termination benefit | 34 | — | |||||||
Prior service cost | — | — | |||||||
Foreign currency | (77 | ) | (135 | ) | |||||
Balance, end of year | $ | 549 | $ | 629 | |||||
Plan assets: | 2014 | 2013 | |||||||
Fair value, beginning of year | $ | — | $ | — | |||||
Company contributions | 122 | 121 | |||||||
Benefits paid to participants | (122 | ) | (121 | ) | |||||
Fair value, end of year | $ | — | $ | — | |||||
Funded status of the Benefit Plan as of December 31 (in thousands): | 2014 | 2013 | |||||||
Benefit obligation | $ | (549 | ) | $ | (629 | ) | |||
Fair value of plan assets | — | — | |||||||
Excess of benefit obligation over fair value of plan assets | $ | (549 | ) | $ | (629 | ) | |||
Amounts recognized in the accompanying Consolidated Balance Sheets consist of, as of December 31 (in thousands): | 2014 | 2013 | |||||||
Accrued benefit liability | $ | (549 | ) | $ | (629 | ) | |||
Transition obligation and unrealized gain | (372 | ) | (458 | ) | |||||
Net amount recognized in the consolidated balance sheets | $ | (921 | ) | $ | (1,087 | ) | |||
Years Ended December 31, | |||||||||
Other changes recognized in comprehensive income/loss (in thousands): | 2014 | 2013 | |||||||
Net periodic cost | $ | 85 | $ | 64 | |||||
Current year (gain) loss | (6 | ) | 59 | ||||||
Amortization of transition obligation | (4 | ) | (4 | ) | |||||
Total recognized in other comprehensive income | (10 | ) | 55 | ||||||
Total recognized in comprehensive income (loss) | $ | 75 | $ | 119 | |||||
As of December 31, | |||||||||
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain/loss (in thousands): | 2014 | 2013 | |||||||
Transition obligation | $ | 13 | $ | 66 | |||||
Prior service cost | 353 | 447 | |||||||
Net actuarial gain | 6 | (55 | ) | ||||||
Total recognized in accumulated other comprehensive loss | $ | 372 | $ | 458 | |||||
2015 estimated amounts of amortized transition obligation (in thousands): | 2015 | ||||||||
Transition obligation | $ | (4 | ) | ||||||
As of December 31, | |||||||||
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets (in thousands): | 2014 | 2013 | |||||||
Projected benefit obligation | $ | 549 | $ | 629 | |||||
Accumulated benefit obligation | 549 | 629 | |||||||
Fair value of plan assets | — | — | |||||||
Weighted-average assumptions to determine the benefit obligation and net cost | The weighted-average assumptions to determine the benefit obligation and net cost are as follows: | ||||||||
2014 | 2013 | ||||||||
Discount rate | 0.5 | % | 0.5 | % | |||||
Rate of increase in compensation levels | — | % | — | % | |||||
Pension expense for Benefit Plan included in selling, general and administrative expenses | Pension expense for the Benefit Plan is included in selling, general and administrative expenses in the Consolidated Statements of Operations and is comprised of the following for the years ended December 31 (in thousands): | ||||||||
2014 | 2013 | ||||||||
Service cost | $ | 88 | $ | 106 | |||||
Interest cost | 3 | 6 | |||||||
Amortization of transition obligation | 4 | 4 | |||||||
Gain | — | (4 | ) | ||||||
Special termination | 34 | — | |||||||
Prior service cost | (44 | ) | (48 | ) | |||||
Benefit adjustment | — | — | |||||||
Total pension expense | $ | 85 | $ | 64 | |||||
Benefits expected to be paid by the Benefit Plan | The Company expects to contribute approximately $66,000 to the Benefit Plan in 2015. As of December 31, 2014, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands): | ||||||||
2015 | $ | 66 | |||||||
2016 | 60 | ||||||||
2017 | 57 | ||||||||
2018 | 54 | ||||||||
2019 | 50 | ||||||||
Next five years | 293 | ||||||||
Total expected benefits to be paid | $ | 580 |
STOCK_OPTION_PLAN_Tables
STOCK OPTION PLAN (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
STOCK OPTION PLAN [Abstract] | |||||||||||||||||
Changes in stock options outstanding | A summary of changes in stock options outstanding during the year ended December 31, 2014, is as follows: | ||||||||||||||||
2014 | |||||||||||||||||
Numberof | Weighted | Weighted | Aggregate | ||||||||||||||
Options | average | average | intrinsic | ||||||||||||||
(in thousands) | exercise | remaining | value (in | ||||||||||||||
price | contractual life | thousands) | |||||||||||||||
(in years) | |||||||||||||||||
Outstanding at beginning of year | 188 | $ | 14.29 | ||||||||||||||
Granted | 95 | $ | 18.17 | ||||||||||||||
Exercised | (16 | ) | $ | 5.56 | |||||||||||||
Forfeited or expired | (18 | ) | $ | 9.14 | |||||||||||||
Outstanding at end of year | 249 | $ | 16.71 | 7.4 | 2,474 | ||||||||||||
Options exercisable at year end | 129 | $ | 19.46 | 6.1 | 4,138 | ||||||||||||
Assumptions used to calculate compensation expense and fair value of stock options granted | The following assumptions were used to calculate the compensation expense and the calculated fair value of stock options granted each year: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Dividend yield: | — | (1) | — | (1) | |||||||||||||
Risk-free interest rate: | 1.3 - 1.5 | % | 0.7 - 1.4 | % | |||||||||||||
Expected market price volatility: | 77.1 – 80.5 | % | 80.3 – 82.3 | % | |||||||||||||
Average expected life of stock options: | 4.5 years | 4.5 years | |||||||||||||||
(1) The Company declared no dividends in 2014 or 2013. | |||||||||||||||||
Share-based compensation expense | The Company recorded the following amounts related to the expense of the fair values of options during the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Selling, general and administrative expenses and income from operations before income taxes | $ | 512 | $ | 173 | |||||||||||||
Benefit for income taxes | (137 | ) | (33 | ) | |||||||||||||
Effect on net income | $ | 375 | $ | 140 | |||||||||||||
Unrecognized compensation cost | As of December 31, 2014, the Company had approximately $0.6 million of total unrecognized compensation expense related to stock options currently outstanding, to be recognized in future years, ending December 31, | ||||||||||||||||
as follows (in thousands): | |||||||||||||||||
Total gross unrecognized | Total tax benefit associated | Total net | |||||||||||||||
compensation expense | with unrecognized | unrecognized | |||||||||||||||
compensation expense | compensation expense | ||||||||||||||||
2015 | $ | 425 | $ | 82 | $ | 343 | |||||||||||
2016 | 225 | 18 | 207 | ||||||||||||||
2017 | 69 | — | 69 | ||||||||||||||
$ | 719 | $ | 100 | $ | 619 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||
Future minimum rental commitments for non-cancelable operating leases | Approximate future minimum rental commitments for non-cancelable operating leases (in thousands) are as follows: | ||||
Years ending December 31, | |||||
2015 | $ | 1,746 | |||
2016 | 1,348 | ||||
2017 | 1,168 | ||||
2018 | 552 | ||||
2019 | 15 | ||||
Thereafter | — | ||||
$ | 4,829 |
SHAREHOLDERS_EQUITY_Tables
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | |||||||||||||
Components of accumulated other comprehensive income (loss) | The after-tax components of accumulated other comprehensive loss, are as follows (in thousands): | ||||||||||||
Foreign | Pension | Accumulated | |||||||||||
Currency | Postretirement | Other | |||||||||||
Translation | Benefit | Comprehensive | |||||||||||
Obligation | Loss, Net | ||||||||||||
Balance as of December 31, 2013 | $ | (1,110 | ) | $ | 367 | $ | (743 | ) | |||||
Current-period change before reclassifications | 653 | — | 653 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | (30 | ) | (30 | ) | ||||||||
Income tax provision | — | 11 | 11 | ||||||||||
Balance as of December 31, 2014 | $ | (457 | ) | $ | 348 | $ | (109 | ) |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||
Net sales shipped to customers by geographic region | Consolidated net sales shipped to customers in these regions, along with pack and product information for the years ended December 31, are as follows (in millions, except percentages): | ||||||||||||||||
Region | 2014 | 2013 | |||||||||||||||
North America | $ | 80.8 | 42.5 | % | $ | 82.2 | 46.3 | % | |||||||||
Asia/Pacific | 92.4 | 48.6 | % | 80.3 | 45.3 | % | |||||||||||
EMEA | 16.9 | 8.9 | % | 14.9 | 8.4 | % | |||||||||||
Total | $ | 190.1 | 100 | % | $ | 177.4 | 100 | % | |||||||||
Product and pack information | 2014 | 2013 | |||||||||||||||
Consolidated product sales | $ | 155.3 | $ | 143.5 | |||||||||||||
Consolidated pack sales | 27.8 | 26.2 | |||||||||||||||
Consolidated other, including freight | 7 | 7.7 | |||||||||||||||
Total | $ | 190.1 | $ | 177.4 | |||||||||||||
Long-lived assets, by geographic region | Long-lived assets by region, which include property and equipment and construction in progress for the Company and its subsidiaries, as of December 31, reside in the following regions, as follows (in millions): | ||||||||||||||||
Region | 2014 | 2013 | |||||||||||||||
North America | $ | 3.1 | $ | 2.4 | |||||||||||||
Asia/Pacific | 0.8 | 0.4 | |||||||||||||||
EMEA | 0.2 | 0.4 | |||||||||||||||
Total | $ | 4.1 | $ | 3.2 | |||||||||||||
Inventory balances, by country | Inventory balances by region, which consist of raw materials, and finished goods, including promotional materials, and offset by obsolete inventories, for the Company and its subsidiaries, reside in the following regions as of December 31, as follows (in millions): | ||||||||||||||||
Region | 2014 | 2013 | |||||||||||||||
North America | $ | 4 | $ | 6.4 | |||||||||||||
Asia/Pacific | 4.3 | 5.3 | |||||||||||||||
EMEA | 2.3 | 2.3 | |||||||||||||||
Total | $ | 10.6 | $ | 14 |
ORGANIZATION_AND_SUMMARY_OF_SI3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Business | |||||
Plan | |||||
Region | |||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||
Number of regions in which company sells products | 3 | ||||
Foreign Currency Translation [Abstract] | |||||
Transaction gains (losses) | ($3,000,000) | ($900,000) | |||
Cash and Cash Equivalents [Abstract] | |||||
Credit card receivables | 600,000 | 1,200,000 | 600,000 | ||
Cash and cash equivalents held in foreign bank accounts | 14,700,000 | 24,800,000 | 14,700,000 | ||
Restricted Cash [Abstract] | |||||
Restricted cash | 5,800,000 | 8,600,000 | 5,800,000 | ||
Accounts Receivables [Abstract] | |||||
Allowance for doubtful accounts | 100,000 | 200,000 | 100,000 | ||
Accounts receivable, net | 100,000 | 200,000 | 100,000 | ||
Other Assets [Abstract] | |||||
Other assets | 3,591,000 | 3,567,000 | 3,591,000 | ||
Deposits for building leases | 1,400,000 | 1,500,000 | 1,400,000 | ||
Fair trade commission deposits | 1,800,000 | 1,700,000 | 1,800,000 | ||
Indefinite lived intangible assets | 200,000 | 200,000 | 200,000 | ||
Other Long-Term Liabilities [Abstract] | |||||
Accrued lease restoration costs | 200,000 | 400,000 | 200,000 | ||
Defined benefit plan obligation | -629,000 | -549,000 | -629,000 | ||
Other long-term liabilities | 2,092,000 | 2,136,000 | 2,092,000 | ||
Financing obligation in noncurrent liabilities | 200,000 | 200,000 | |||
Uncertain income tax positions recorded in noncurrent liabilities | 700,000 | 700,000 | 700,000 | ||
Revenue Recognition [Abstract] | |||||
Deferred revenue | 6,400,000 | 10,900,000 | 6,400,000 | ||
Deferred commissions | 2,706,000 | 4,544,000 | 2,706,000 | ||
Percentage of sale returns (in hundredths) | 1.50% | ||||
Loyalty Program [Abstract] | |||||
Loyalty deferred revenue, beginning balance | 0 | 5,456,000 | |||
Loyalty points forfeited | -1,136,000 | -4,664,000 | |||
Loyalty points used | -723,000 | -12,348,000 | |||
Loyalty points vested | 5,072,000 | 19,580,000 | |||
Loyalty points unvested | 2,243,000 | 1,679,000 | |||
Loyalty deferred revenue, ending balance | 5,456,000 | 9,703,000 | 5,456,000 | ||
Shipping and Handling Costs [Abstract] | |||||
Revenue from freight and shipping fees | 7,400,000 | 7,700,000 | |||
Freight costs | 6,700,000 | 6,800,000 | |||
Commissions and Incentives Expenses [Abstract] | |||||
Number of business periods per year | 13 | ||||
Number of days per business period | 28 days | ||||
Number of weeks following business period end for payment of product sales commissions | 3 | ||||
Number of weeks following business period end for payment of pack sales commissions | 5 | ||||
Advertising Expenses [Abstract] | |||||
Advertising and promotional expense | 4,900,000 | 4,300,000 | |||
Research and Development Expenses [Abstract] | |||||
Research and development consulting fees | 1,600,000 | 1,600,000 | |||
Stock-Based Compensation [Abstract] | |||||
Number of active stock based compensation plan | 1 | ||||
Option contract term | P10Y | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentages of stock option ownership considered for higher exercise price of option (in hundredths) | 10.00% | ||||
Option exercise price as percentages of closing exercise price of stock for specific shareholders (in hundredths) | 110.00% | ||||
Expiration period of stock option plan | 5 years | ||||
Concentration Risk [Line Items] | |||||
Concentration risk, sales by product | 98,647,000 | 84,203,000 | |||
Concentration risk, percentage of net sales (in hundredths) | 51.90% | 47.50% | |||
Advanced Ambrotose [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, sales by product | 63,791,000 | 59,894,000 | |||
Concentration risk, percentage of net sales (in hundredths) | 33.60% | 33.70% | |||
Ambrotose [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, sales by product | 10,895,000 | 10,939,000 | |||
Concentration risk, percentage of net sales (in hundredths) | 5.70% | 6.20% | |||
Uth Skin Rejuvenation [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, sales by product | 13,431,000 | 2,406,000 | |||
Concentration risk, percentage of net sales (in hundredths) | 7.10% | 1.40% | |||
NutriVerus [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, sales by product | 10,530,000 | 10,964,000 | |||
Concentration risk, percentage of net sales (in hundredths) | 5.50% | 6.20% | |||
Reserve for Sales Returns [Member] | |||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at beginning of year | 238,000 | 156,000 | |||
Provision related to sales made in current period | 1,618,000 | ||||
Adjustment related to sales made in prior periods | 10,000 | ||||
Actual returns or credits related to current period | -1,411,000 | ||||
Actual returns or credits related to prior periods | -248,000 | ||||
Balance at end of year | $207,000 | $156,000 | |||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of stock options | 2 years | ||||
Minimum [Member] | Software [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life of software | 3 years | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of stock options | 3 years | ||||
Maximum [Member] | Software [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life of software | 5 years | ||||
Office Furniture and Equipment [Member] | Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 5 years | ||||
Office Furniture and Equipment [Member] | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 7 years | ||||
Computer Hardware and Software [Member] | Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 3 years | ||||
Computer Hardware and Software [Member] | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 5 years | ||||
Automobiles [Member] | Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 3 years | ||||
Automobiles [Member] | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 5 years | ||||
Leasehold Improvements [Member] | Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 2 years | [1] | |||
Leasehold Improvements [Member] | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives of assets | 10 years | [1] | |||
[1] | The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash | $8,600 | $5,800 |
Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 6,159 | 3,044 |
Restricted cash | 738 | 329 |
Long-term restricted cash | 5,817 | 3,622 |
Total | 12,714 | 6,995 |
Recurring Basis [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 6,159 | 3,044 |
Restricted cash | 738 | 329 |
Long-term restricted cash | 5,817 | 3,622 |
Total | 12,714 | 6,995 |
Recurring Basis [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | 0 | 0 |
Recurring Basis [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | 0 | 0 |
Money Market Funds - Fidelity, US [Member] | Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 392 | 192 |
Money Market Funds - Fidelity, US [Member] | Recurring Basis [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 392 | 192 |
Money Market Funds - Fidelity, US [Member] | Recurring Basis [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Money Market Funds - Fidelity, US [Member] | Recurring Basis [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Interest Bearing Deposits - Various Banks [Member] | Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term restricted cash | 12,322 | 6,803 |
Interest Bearing Deposits - Various Banks [Member] | Recurring Basis [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term restricted cash | 12,322 | 6,803 |
Interest Bearing Deposits - Various Banks [Member] | Recurring Basis [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term restricted cash | 0 | 0 |
Interest Bearing Deposits - Various Banks [Member] | Recurring Basis [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term restricted cash | $0 | $0 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ||
Raw materials | $2,118 | $4,396 |
Finished goods | 10,615 | 11,601 |
Inventory reserves for obsolescence | -2,142 | -2,009 |
Total | $10,591 | $13,988 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | $75,546 | $75,142 |
Less accumulated depreciation and amortization | -73,065 | -71,972 |
Property and equipment, net | 2,481 | 3,170 |
Construction in progress | 1,622 | 69 |
Total | 4,103 | 3,239 |
Office Furniture and Equipment [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 8,666 | 8,797 |
Computer Hardware [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 7,738 | 7,779 |
Computer Software [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 46,791 | 46,535 |
Automobiles [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 81 | 111 |
Leasehold Improvements [Member] | ||
Summary of property and equipment [Abstract] | ||
Property and equipment, gross | 12,270 | 11,920 |
Construction in Process [Member] | ||
Summary of property and equipment [Abstract] | ||
Construction in progress | $1,622 | $69 |
CAPITAL_LEASE_OBLIGATIONS_Deta
CAPITAL LEASE OBLIGATIONS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CAPITAL LEASE OBLIGATIONS [Abstract] | ||
Net book value of leased assets | $1,300,000 | $600,000 |
Schedule of future minimum lease payments [Abstract] | ||
2015 | 967,000 | |
2016 | 444,000 | |
2017 | 319,000 | |
2018 | 133,000 | |
2019 | 0 | |
Total future minimum lease payments | 1,863,000 | |
Less: Amounts representing interest (effective interest rate 6.1%) | -110,000 | |
Present value of minimum lease payments | 1,753,000 | |
Current portion of capital lease obligations | -901,000 | -704,000 |
Long-term portion of capital lease obligations | $852,000 | $450,000 |
Capital Lease [Member] | ||
Capital Leased Assets [Line Items] | ||
Effective interest rate (in hundredths) | 6.10% |
ACCRUED_EXPENSES_Details
ACCRUED EXPENSES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Summary of accrued expenses [Abstract] | ||||
Accrued asset purchases | $291,000 | $75,000 | ||
Accrued compensation | 2,180,000 | 1,964,000 | ||
Accrued royalties | 105,000 | 104,000 | ||
Accrued sales and other taxes | 1,193,000 | 170,000 | ||
Other accrued operating expenses | 786,000 | [1] | 962,000 | [1] |
Customer deposits and sales returns | 211,000 | 243,000 | ||
Accrued travel expenses related to corporate events | 107,000 | 303,000 | ||
Accrued shipping and handling costs | 344,000 | 812,000 | ||
Rent expense | 147,000 | 150,000 | ||
Accrued legal and accounting fees | 992,000 | 1,013,000 | ||
Total | 6,356,000 | 5,796,000 | ||
Office assessment expenses | $190 | |||
[1] | 2013 balance includes $190 for the Korea Busan Custom Office assessment, resulting from an audit covering fiscal years 2008 through 2012, which was paid in January 2014. |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components of Company's loss before income taxes [Abstract] | |||
United States | $2,044,000 | $702,000 | |
Foreign | 7,777,000 | 2,107,000 | |
Income before income taxes | 9,821,000 | 2,809,000 | |
Current provision [Abstract] | |||
Federal | 2,433,000 | 124,000 | |
State | 43,000 | 144,000 | |
Foreign | 2,547,000 | 1,434,000 | |
Total | 5,023,000 | 1,702,000 | |
Deferred provision (benefit) [Abstract] | |||
Federal | -1,792,000 | -1,883,000 | |
State | 349,000 | 0 | |
Foreign | -255,000 | -184,000 | |
Total | -1,698,000 | -2,067,000 | |
Total | 3,325,000 | -365,000 | |
Reconciliation of effective income tax rate and United States federal statutory income tax rate [Abstract] | |||
Federal statutory income taxes (in hundredths) | 35.00% | 35.00% | |
State income taxes, net of federal benefit (in hundredths) | 3.50% | 1.30% | |
Difference in foreign and United States tax on foreign operations (in hundredths) | -16.10% | -11.60% | |
Effect of changes in valuation allowance for net operating loss carryforwards (in hundredths) | 14.30% | -55.90% | |
Effect of change in uncertain tax positions (net) (in hundredths) | 0.50% | -17.00% | |
Federal Sub-Part F Income from foreign operations (in hundredths) | 2.90% | 11.80% | |
Other (in hundredths) | -6.20% | 23.40% | |
Total (in hundredths) | 33.90% | -13.00% | |
Current [Abstract] | |||
Deferred revenue | 453,000 | -26,000 | |
Inventory capitalization | 171,000 | 228,000 | |
Inventory reserves | 762,000 | 644,000 | |
Accrued expenses | 697,000 | 917,000 | |
Other | 127,000 | 108,000 | |
Total current deferred tax assets | 2,210,000 | 1,871,000 | |
Noncurrent [Abstract] | |||
Depreciation and amortization | 1,867,000 | 1,834,000 | |
Net operating loss | 5,842,000 | 5,078,000 | |
Deferred revenue | 28,000 | 39,000 | |
Non-cash accounting charges related to stock options and warrants | 628,000 | 520,000 | |
Accrued expenses | 350,000 | 366,000 | |
Foreign tax credit carryover | 3,855,000 | 0 | |
Other | 506,000 | 843,000 | |
Total noncurrent deferred tax assets | 13,076,000 | 8,680,000 | |
Total deferred tax assets | 15,286,000 | 10,551,000 | |
Valuation allowance | -9,745,000 | -5,264,000 | |
Total deferred tax assets, net of valuation allowance | 5,541,000 | 5,287,000 | |
Current [Abstract] | |||
Prepaid expenses | 413,000 | 396,000 | |
Deferred Commissions | 769,000 | 5,000 | |
Other | 10,000 | 0 | |
Total current deferred tax liabilities | 1,192,000 | 401,000 | |
Noncurrent [Abstract] | |||
Internally-developed software | 11,000 | 15,000 | |
Depreciation and amortization | 2,000 | 2,000 | |
Sub-Part F Income Deferred | 0 | 2,163,000 | |
Other | 24,000 | -52,000 | |
Total noncurrent deferred tax liabilities | 37,000 | 2,128,000 | |
Total deferred tax liabilities | 1,229,000 | 2,529,000 | |
Valuation Allowance [Line Items] | |||
Valuation allowance | -9,745,000 | -5,264,000 | |
Deferred tax assets liabilities classified in Consolidated Balance Sheets [Abstract] | |||
Current deferred tax assets | 1,141,000 | 1,578,000 | |
Noncurrent deferred tax assets | 3,320,000 | 1,303,000 | |
Current deferred tax liabilities | -123,000 | -114,000 | |
Other long-term liabilities | -26,000 | -9,000 | |
Net deferred tax assets | 4,312,000 | 2,758,000 | |
Uncertain income tax positions recorded in current liabilities | 100,000 | ||
Uncertain income tax positions recorded in noncurrent liabilities | 700,000 | 700,000 | |
Unrecognized tax benefits that would impact effective tax rate | 800,000 | ||
Reconciliation of beginning and ending amount of unrecognized tax benefits [Roll Forward] | |||
Balance as of January 1 | 738,000 | 3,039,000 | |
Additions for tax positions related to the current year | 1,000 | 436,000 | |
Additions for tax positions of prior years | 111,000 | 292,000 | |
Reductions of tax positions of prior years | -47,000 | -3,029,000 | |
Balance as of December 31 | 803,000 | 738,000 | |
Net tax deficiency associated with income tax examination | 800,000 | ||
Interest expense on income tax examination | 200,000 | ||
Tax benefit associated with income tax examination | 1,000,000 | ||
Australia [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2010 | ||
Australia [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Cyprus [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 5,000 | ||
Tax Effected NOL | 1,000 | ||
Expiration Years | 2019 | ||
Canada [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 0 | ||
Tax Effected NOL | 0 | ||
Expiration Years | 2043 | ||
Canada [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2010 | ||
Canada [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Denmark [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 1,000 | ||
Tax Effected NOL | 0 | ||
Expiration Years | Indefinite | ||
Denmark [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2011 | ||
Denmark [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Japan [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2011 | ||
Japan [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Mexico [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 2,700,000 | 2,700,000 | |
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 9,000,000 | ||
Tax Effected NOL | 2,700,000 | ||
Expiration Years | 2020-2023 | ||
Valuation Allowance [Line Items] | |||
Valuation allowance | 2,700,000 | 2,700,000 | |
Mexico [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2010 | ||
Mexico [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Norway [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 100,000 | 200,000 | |
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 448,000 | ||
Tax Effected NOL | 121,000 | ||
Expiration Years | Indefinite | ||
Valuation Allowance [Line Items] | |||
Valuation allowance | 100,000 | 200,000 | |
Norway [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2008 | ||
Norway [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Republic of Korea [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2009 | ||
Republic of Korea [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Singapore [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 28,000 | ||
Tax Effected NOL | 5,000 | ||
Expiration Years | Indefinite | ||
Singapore [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2010 | ||
Singapore [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
South Africa [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2011 | ||
South Africa [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Sweden [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 100,000 | 100,000 | |
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 541,000 | ||
Tax Effected NOL | 119,000 | ||
Expiration Years | Indefinite | ||
Valuation Allowance [Line Items] | |||
Valuation allowance | 100,000 | 100,000 | |
Sweden [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2009 | ||
Sweden [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Switzerland [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 1,200,000 | 200,000 | |
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 13,612,000 | ||
Tax Effected NOL | 1,234,000 | ||
Expiration Years | 2016-2020 | ||
Valuation Allowance [Line Items] | |||
Valuation allowance | 1,200,000 | 200,000 | |
Switzerland [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2009 | ||
Switzerland [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Taiwan [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 1,200,000 | 1,200,000 | |
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 7,152,000 | ||
Tax Effected NOL | 1,215,000 | ||
Expiration Years | 2016-2023 | ||
Valuation Allowance [Line Items] | |||
Valuation allowance | 1,200,000 | 1,200,000 | |
Taiwan [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2009 | ||
Taiwan [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
United Kingdom [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2008 | ||
United Kingdom [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
United States [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 4,300,000 | 800,000 | |
Valuation Allowance [Line Items] | |||
Valuation allowance | 4,300,000 | 800,000 | |
United States [Member] | Earliest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2008 | ||
United States [Member] | Latest Open Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Open tax years | 2014 | ||
Ukraine [Member] | |||
Noncurrent [Abstract] | |||
Valuation allowance | 100,000 | 100,000 | |
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 678,000 | ||
Tax Effected NOL | 122,000 | ||
Expiration Years | Indefinite | ||
Valuation Allowance [Line Items] | |||
Valuation allowance | 100,000 | 100,000 | |
United States (states) [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Gross NOL | 12,996,000 | ||
Tax Effected NOL | $325,000 | ||
Expiration Years | 2015-2032 |
TRANSACTIONS_WITH_RELATED_PART2
TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2014 | |
Landen Fredrick [Member] | |||
Related Party Transaction [Line Items] | |||
Officers' compensation | $170,000 | ||
Mr. Caster [Member] | |||
Related Party Transaction [Line Items] | |||
Beneficial ownership (in hundredths) | 18.00% | 5.00% | |
Cash donations and sold products [Abstract] | |||
Consulting services charged | 100,000 | 700,000 | |
MannaRelief [Member] | |||
Cash donations and sold products [Abstract] | |||
Sold Products | 300,000 | 200,000 | |
Contributed Cash Donations | 300,000 | 900,000 | |
Mr. Ray Robbins [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 2,600,000 | 2,400,000 | |
Family Members [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 300,000 | 300,000 | |
Mr. Robbins' and Family Members [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 2,900,000 | 2,600,000 | |
Kevin Robbins [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 200,000 | 200,000 | |
Ryan Robbins, the son of Mr. Ray Robbins [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 100,000 | ||
Marla Finley and Daughter-in-law Demra Robbins [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 100,000 | 100,000 | |
Mrs. Bala wife of Al Bala, the President [Member] | |||
Cash donations and sold products [Abstract] | |||
Payment of employment related compensation | 200,000 | 100,000 | |
M5M Foundation [Member] | |||
Cash donations and sold products [Abstract] | |||
Contributed Cash Donations | $500,000 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Age | ||
EMPLOYEE BENEFIT PLANS [Abstract] | ||
Service period, minimum | 3 months | |
Employees eligible age under plan, minimum | 21 | |
Maximum annual contribution per employee (in hundredths) | 100.00% | |
Vesting period of employer's matching contributions | 5 years | |
Contributions by employer | $200,000 | $100,000 |
Projected benefit obligation [Roll Forward] | ||
Balance, beginning of year | 629,000 | 714,000 |
Service cost | 88,000 | 106,000 |
Interest cost | 3,000 | 6,000 |
Liability losses | -6,000 | 59,000 |
Benefits paid to participants | -122,000 | -121,000 |
Special termination benefit | 34,000 | 0 |
Prior service cost | 0 | 0 |
Foreign currency | -77,000 | -135,000 |
Balance, end of year | 549,000 | 629,000 |
Plan assets [Roll Forward] | ||
Fair value, beginning of year | 0 | 0 |
Company contributions | 122,000 | 121,000 |
Benefits paid to participants | -122,000 | -121,000 |
Fair value, end of year | 0 | 0 |
Funded status of the Benefit Plan [Abstract] | ||
Benefit obligation | -549,000 | -629,000 |
Fair value of plan assets | 0 | 0 |
Excess of benefit obligation over fair value of plan assets | -549,000 | -629,000 |
Amounts recognized in the accompanying Consolidated Balance Sheets [Abstract] | ||
Accrued benefit liability | -549,000 | -629,000 |
Transition obligation and unrealized gain | -372,000 | -458,000 |
Net amount recognized in the consolidated balance sheets | -921,000 | -1,087,000 |
Other changes recognized in comprehensive income/loss [Abstract] | ||
Net periodic cost | 85,000 | 64,000 |
Current year (gain) loss | -6,000 | 59,000 |
Amortization of transition obligation | -4,000 | -4,000 |
Total recognized in other comprehensive income | -10,000 | 55,000 |
Total recognized in comprehensive income (loss) | 75,000 | 119,000 |
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain/loss [Abstract] | ||
Transition obligation | 13,000 | 66,000 |
Prior service cost | 353,000 | 447,000 |
Net actuarial gain | 6,000 | -55,000 |
Total recognized in accumulated other comprehensive loss | 372,000 | 458,000 |
2015 estimated amounts of amortized transition obligation [Abstract] | ||
Transition obligation | -4,000 | |
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets [Abstract] | ||
Projected benefit obligation | 549,000 | 629,000 |
Accumulated benefit obligation | 549,000 | 629,000 |
Fair value of plan assets | 0 | 0 |
Weighted-average assumptions to determine the benefit obligation and net cost [Abstract] | ||
Discount rate (in hundredths) | 0.50% | 0.50% |
Rate of increase in compensation levels (in hundredths) | 0.00% | 0.00% |
Pension expense for Benefit Plan included in selling, general and administrative expenses [Abstract] | ||
Service cost | 88,000 | 106,000 |
Interest cost | 3,000 | 6,000 |
Amortization of transition obligation | 4,000 | 4,000 |
Gain | 0 | -4,000 |
Special termination | 34,000 | 0 |
Prior service cost | -44,000 | -48,000 |
Benefit adjustment | 0 | 0 |
Total pension expense | 85,000 | 64,000 |
Expected employer's contributions in 2015 | 66,000 | |
Period over which benefits are expected to be paid | 10 years | |
Benefits expected to be paid by the Benefit Plan [Abstract] | ||
2015 | 66,000 | |
2016 | 60,000 | |
2017 | 57,000 | |
2018 | 54,000 | |
2019 | 50,000 | |
Next five years | 293,000 | |
Total expected benefits to be paid | $580,000 |
STOCK_OPTION_PLAN_Details
STOCK OPTION PLAN (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
Apr. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of active stock based compensation plan | 1 | ||||
Option contract term | P10Y | ||||
Percentages of stock option ownership considered for higher exercise price of option (in hundredths) | 10.00% | ||||
Option exercise price as percentages of closing exercise price of stock for specific shareholders (in hundredths) | 110.00% | ||||
Expiration period of stock option plan | 5 years | ||||
Number of shares authorized (in shares) | 1,000,000 | ||||
Increase in number of shares authorized (in shares) | 130,000 | 100,000 | |||
Number of shares available for grant (in shares) | 135,871 | ||||
Intrinsic value of exercised options | $200,000 | $200,000 | |||
Non-vested shares (in shares) | 121,000 | 89,000 | |||
New shares issued (in shares) | 16,164 | ||||
Number of Options [Roll Forward] | |||||
Outstanding at beginning of year (in shares) | 188,000 | ||||
Granted (in shares) | 95,000 | ||||
Exercised (in shares) | -16,000 | ||||
Forfeited or expired (in shares) | -18,000 | ||||
Outstanding at end of year (in shares) | 249,000 | 188,000 | |||
Options exercisable at year end (in shares) | 129,000 | ||||
Weighted average exercise price [Roll Forward] | |||||
Outstanding at beginning of year (in dollars per share) | $14.29 | ||||
Granted (in dollars per share) | $18.17 | ||||
Exercised (in dollars per share) | $5.56 | ||||
Forfeited or expired (in dollars per share) | $9.14 | ||||
Outstanding at end of year (in dollars per share) | $16.71 | $14.29 | |||
Options exercisable at year end (in dollars per share) | $19.46 | ||||
Weighted average remaining contractual life (in years) [Abstract] | |||||
Outstanding at end of year | 7 years 4 months 24 days | ||||
Options exercisable at year end | 6 years 1 month 6 days | ||||
Aggregate intrinsic value [Abstract] | |||||
Outstanding at end of year | 2,474,000 | ||||
Options exercisable at year end | 4,138,000 | ||||
Assumptions used to calculate compensation expense and fair value of stock options granted [Abstract] | |||||
Dividend yield (in hundredths) | 0.00% | [1] | 0.00% | [1] | |
Risk-free interest rate, minimum (in hundredths) | 1.30% | 0.70% | |||
Risk-free interest rate, maximum (in hundredths) | 1.50% | 1.40% | |||
Expected market price volatility, minimum (in hundredths) | 77.10% | 80.30% | |||
Expected market price volatility, maximum (in hundredths) | 80.50% | 82.30% | |||
Average expected life of stock options | 4 years 6 months | 4 years 6 months | |||
Weighted-average grant-date fair value (in dollars per share) | $11.25 | $3.96 | |||
Total fair value of shares vested | 100,000 | 100,000 | |||
Summary of amounts related to the expense of the fair values of options [Abstract] | |||||
Selling, general and administrative expenses and income from operations before income taxes | 512,000 | 173,000 | |||
Benefit for income taxes | -137,000 | -33,000 | |||
Effect on net income | 375,000 | 140,000 | |||
Unrecognized compensation expense [Abstract] | |||||
Total gross unrecognized compensation expense in 2015 | 425,000 | ||||
Total gross unrecognized compensation expense in 2016 | 225,000 | ||||
Total gross unrecognized compensation expense in 2017 | 69,000 | ||||
Total unrecognized compensation expense | 719,000 | ||||
Tax benefit associated with unrecognized compensation expense in 2015 | 82,000 | ||||
Tax benefit associated with unrecognized compensation expense in 2016 | 18,000 | ||||
Tax benefit associated with unrecognized compensation expense in 2017 | 0 | ||||
Total tax benefit associated with unrecognized compensation expense | 100,000 | ||||
Total net unrecognized compensation expense in 2015 | 343,000 | ||||
Total net unrecognized compensation expense in 2016 | 207,000 | ||||
Total net unrecognized compensation expense in 2017 | 69,000 | ||||
Total net unrecognized compensation expense | $619,000 | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of stock options | 2 years | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of stock options | 3 years | ||||
Board of Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant (in shares) | 6,000 | ||||
[1] | The Company declared no dividends in 2014 or 2013. |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
Lease expiration date | 30-Aug-23 | |
Total rent expense | $3,900,000 | $3,500,000 |
Summary of future minimum rental commitments for non-cancelable operating leases [Abstract] | ||
2015 | 1,746,000 | |
2016 | 1,348,000 | |
2017 | 1,168,000 | |
2018 | 552,000 | |
2019 | 15,000 | |
Thereafter | 0 | |
Total | 4,829,000 | |
Royalty and Consulting Agreements [Line Items] | ||
Payable amount on termination of employment relationships with executives | 700,000 | |
Royalty Agreements with Individuals and Entities [Member] | ||
Royalty and Consulting Agreements [Line Items] | ||
Payment of royalties | 300,000 | 300,000 |
Purchase Commitments Agreement with InB:Biotechnologies, Inc. [Member] | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Supply agreement period | 10 years | |
Purchase commitment aggregate amount | $5,800,000 |
LITIGATION_Details
LITIGATION (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Litigation in General [Abstract] | ||
Taxes payable | $0.20 | |
Assessment notice, Other expenses | 1 | |
Pending Litigation [Member] | ||
Business Arbitration and Litigation [Abstract] | ||
Damages sought | $1,000,000 |
SHAREHOLDERS_EQUITY_Details
SHAREHOLDERS' EQUITY (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Dec. 04, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2004 | Aug. 28, 2006 | 19-May-98 | Mar. 10, 2015 | |
Preferred Stock [Abstract] | |||||||
Common stock, shares authorized (in shares) | 99,000,000 | 99,000,000 | 100,000,000 | ||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |||||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Shares issued for services rendered | 6,000 | ||||||
Additional shares issued due to exercise of stock options | 16,164 | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | ($743,000) | ||||||
Current-period change before reclassifications | 653,000 | ||||||
Amounts reclassified from accumulated other comprehensive income | -30,000 | ||||||
Income tax provision | 11,000 | 39,000 | |||||
Ending balance | -109,000 | -743,000 | |||||
Accumulated Translation Adjustment [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | -1,110,000 | ||||||
Current-period change before reclassifications | 653,000 | ||||||
Amounts reclassified from accumulated other comprehensive income | 0 | ||||||
Income tax provision | 0 | ||||||
Ending balance | -457,000 | ||||||
Accumulated Defined Benefit Plans Adjustment [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | 367,000 | ||||||
Current-period change before reclassifications | 0 | ||||||
Amounts reclassified from accumulated other comprehensive income | -30,000 | ||||||
Income tax provision | 11,000 | ||||||
Ending balance | 348,000 | ||||||
June 2004 Plan [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, repurchase authorization | the lesser of (i) 131,756 shares of its common stock and (ii) $1.3 million of its shares | ||||||
Number of common shares authorized to be repurchased (in shares) | 131,756 | ||||||
Stock repurchase program, authorized amount | 1,300,000 | ||||||
June 2004 Plan [Member] | Subsequent Event [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, remaining number of shares authorized to be repurchased (in shares) | 19,084 | ||||||
Stock repurchased since inception shares (in shares) | 112,672 | ||||||
August 2006 Plan [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, repurchase authorization | up to $20 million of its outstanding shares | ||||||
Stock repurchase program, authorized amount | $20,000,000 | ||||||
Common stock repurchased (in shares) | 0 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Average common stock close price (in dollars per share) | $16.66 | $14.32 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.1 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Country | ||
Region | ||
SEGMENT INFORMATION [Abstract] | ||
Minimum percentage of revenue considered for accounted of major customer (in hundredths) | 10.00% | |
Number of countries in which company operates facilities | 10 | |
Number of countries in which company sells products | 24 | |
Number of regions in which company sells products | 3 | |
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | $190,100,000 | $177,400,000 |
Percent of total revenue (in hundredths) | 100.00% | 100.00% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | 4,103,000 | 3,239,000 |
Inventory, by Country [Abstract] | ||
Inventories, net | 10,591,000 | 13,988,000 |
North America [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 80,800,000 | 82,200,000 |
Percent of total revenue (in hundredths) | 42.50% | 46.30% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | 3,100,000 | 2,400,000 |
Inventory, by Country [Abstract] | ||
Inventories, net | 4,000,000 | 6,400,000 |
Asia/Pacific [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 92,400,000 | 80,300,000 |
Percent of total revenue (in hundredths) | 48.60% | 45.30% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | 800,000 | 400,000 |
Inventory, by Country [Abstract] | ||
Inventories, net | 4,300,000 | 5,300,000 |
EMEA [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 16,900,000 | 14,900,000 |
Percent of total revenue (in hundredths) | 8.90% | 8.40% |
Long-lived assets by country of domicile [Abstract] | ||
Long-lived assets | 200,000 | 400,000 |
Inventory, by Country [Abstract] | ||
Inventories, net | 2,300,000 | 2,300,000 |
Consolidated Product Sales [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 155,300,000 | 143,500,000 |
Consolidated Pack Sales [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | 27,800,000 | 26,200,000 |
Consolidated Other, Including Freight [Member] | ||
Revenue from External Customer [Line Items] | ||
Consolidated net sales shipped to customers | $7,000,000 | $7,700,000 |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for Doubtful Accounts [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | $142 | $20 |
Additions Charged to Costs and Expenses | 579 | 178 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | -508 | -56 |
Balance at end of year | 213 | 142 |
Allowance for Obsolete Inventories [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | 2,009 | 1,619 |
Additions Charged to Costs and Expenses | 2,124 | 1,229 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | -1,991 | -839 |
Balance at end of year | 2,142 | 2,009 |
Valuation Allowance for Deferred Tax Assets [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | 5,264 | 8,519 |
Additions Charged to Costs and Expenses | 5,344 | 612 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | -863 | -3,867 |
Balance at end of year | 9,745 | 5,264 |
Reserve for Sales Returns [Member] | ||
Schedule of Valuation and Qualifying Accounts [Roll Forward] | ||
Balance at beginning of year | 238 | 156 |
Additions Charged to Costs and Expenses | 1,628 | 1,371 |
Additions Charged to other Accounts | 0 | 0 |
Deductions | -1,659 | -1,289 |
Balance at end of year | $207 | $238 |