Mannatech (MTEX) 10-Q 4 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	MANNATECH INC
Entity Central Index Key	1,056,358
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,681,078
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015

CONSOLIDATED BALANCE SHEETS - (

CONSOLIDATED BALANCE SHEETS - (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 30,663	$ 27,999
Restricted cash	1,515	1,511
Accounts receivable, net of allowance of $237 and $213 in 2015 and 2014, respectively	336	504
Income tax receivable	15	4
Inventories, net	14,247	10,591
Prepaid expenses and other current assets	2,668	3,069
Deferred commissions	4,152	4,544
Deferred tax assets, net	1,184	1,141
Total current assets	54,780	49,363
Property and equipment, net	4,434	2,481
Construction in progress	439	1,622
Long-term restricted cash	7,297	7,045
Other assets	4,033	3,567
Long-term deferred tax assets, net	3,462	3,320
Total assets	74,445	67,398
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of capital leases	761	901
Accounts payable	6,398	4,252
Accrued expenses	6,699	6,356
Commissions and incentives payable	8,722	7,908
Taxes payable	2,538	2,578
Current deferred tax liability	129	123
Deferred revenue	9,770	10,890
Total current liabilities	35,017	33,008
Capital leases, excluding current portion	1,260	852
Long-term deferred tax liabilities	69	26
Other long-term liabilities	2,167	2,136
Total liabilities	$ 38,513	$ 36,022
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 2,681,078 shares outstanding as of June 30,2015 and 2,773,972 shares issued and 2,676,077 shares outstanding as of December 31, 2014	0	0
Additional paid-in capital	40,408	40,672
Retained earnings	6,992	2,750
Accumulated other comprehensive loss	(141)	(109)
Treasury stock, at average cost, 92,894 shares as of June 30,2015 and 97,895 shares as of December 31, 2014, respectively	(11,327)	(11,937)
Total shareholders' equity	35,932	31,376
Total liabilities and shareholders' equity	$ 74,445	$ 67,398

CONSOLIDATED BALANCE SHEETS - 3

CONSOLIDATED BALANCE SHEETS - (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Accounts receivable, allowance for doubtful accounts	$ 237	$ 213
Shareholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	99,000,000	99,000,000
Common stock, shares issued (in shares)	2,773,972	2,773,972
Common stock, shares outstanding (in shares)	2,681,078	2,676,077
Treasury stock, shares (in shares)	92,894	97,895

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) [Abstract]
Net sales	$ 46,726	$ 46,302	$ 91,096	$ 89,265
Cost of sales	8,270	9,738	16,823	19,136
Gross profit	38,456	36,564	74,273	70,129
Operating expenses:
Commissions and incentives	18,887	19,782	36,429	36,750
Selling and administrative	8,598	8,946	17,411	16,822
Depreciation and amortization	495	421	891	807
Other operating costs	5,866	6,815	12,421	13,771
Total operating expenses	33,846	35,964	67,152	68,150
Income from operations	4,610	600	7,121	1,979
Interest income	31	35	61	36
Other income (expense), net	(452)	192	(1,384)	(144)
Income before income taxes	4,189	827	5,798	1,871
Provision for income taxes	(1,046)	(1,519)	(1,556)	(2,335)
Net income (loss)	$ 3,143	$ (692)	$ 4,242	$ (464)
Earnings (loss) per common share:
Basic (in dollars per share)	$ 1.17	$ (0.26)	$ 1.58	$ (0.17)
Diluted (in dollars per share)	$ 1.15	$ (0.26)	$ 1.55	$ (0.17)
Weighted-average common shares outstanding:
Basic (in shares)	2,680	2,662	2,678	2,658
Diluted (in shares)	2,729	2,662	2,730	2,658

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - (UNAUDITED) [Abstract]
Net income (loss)	$ 3,143	$ (692)	$ 4,242	$ (464)
Foreign currency translations	(274)	566	(32)	628
Comprehensive income (loss)	$ 2,869	$ (126)	$ 4,210	$ 164

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - (UNAUDITED) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Common Stock Par Value [Member]	Additional Paid in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2014	$ 0	$ 40,672	$ 2,750	$ (109)	$ (11,937)	$ 31,376
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	4,242	0	0	4,242
Charge related to stock-based compensation	0	301	0	0	0	301
Stock option exercises	0	(581)	0	0	610	29
Tax benefit from exercise of stock options	0	16	0	0	0	16
Foreign currency translations	0	0	0	(32)	0	(32)
Balance at Jun. 30, 2015	$ 0	$ 40,408	$ 6,992	$ (141)	$ (11,327)	$ 35,932

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 4,242	$ (464)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	891	807
Provision for inventory losses	345	1,630
Provision for doubtful accounts	194	186
Loss on disposal of assets	8	37
Accounting charge related to stock-based compensation expense	301	302
Tax benefit from exercise of stock options	(16)	0
Deferred income taxes	(139)	221
Changes in operating assets and liabilities:
Accounts receivable	(55)	16
Income tax receivable	(11)	(16)
Inventories	(4,242)	(896)
Prepaid expenses and other current assets	962	(79)
Other assets	(97)	(303)
Deferred commissions	351	(1,941)
Accounts payable	2,164	65
Customer deposits	0	3,075
Accrued expenses and other liabilities	177	763
Taxes payable	(17)	1,101
Commissions and incentives payable	910	(1,924)
Deferred revenue	(1,038)	4,825
Change in restricted cash	(449)	(18)
Net cash provided by operating activities	4,481	7,387
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(1,174)	(1,193)
Proceeds from sale of assets	0	8
Net cash used in investing activities	(1,174)	(1,185)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock options exercised	29	70
Tax benefit from exercise of stock options	16	0
Repayment of capital lease obligations	(981)	(680)
Net cash used in financing activities	(936)	(610)
Effect of currency exchange rate changes on cash and cash equivalents	293	491
Net increase in cash and cash equivalents	2,664	6,083
Cash and cash equivalents at the beginning of the period	27,999	20,395
Cash and cash equivalents at the end of the period	30,663	26,478
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid, net	3,959	1,259
Interest paid on capital leases	47	52
Assets acquired through financing arrangements	$ 1,250	$ 1,562

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
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 (“Nasdaq”) under the symbol “MTEX”. The Company develops, markets, and sells high-quality, proprietary nutritional supplements, topical and skin care products, and weight-management products. We currently sell our products in three regions: (i) North America (the United States, Canada and Mexico); (ii) Europe/Middle East/Africa, (“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 associates are eligible to earn commissions and incentives. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the Company’s consolidated financial statements and footnotes contained herein do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) to be considered “complete financial statements”. However, in the opinion of the Company’s management, the accompanying unaudited consolidated financial statements and footnotes contain all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Company’s consolidated financial information as of, and for, the periods presented. The Company cautions that its consolidated results of operations for an interim period are not necessarily indicative of its consolidated results of operations to be expected for its fiscal year. The December 31, 2014 consolidated balance sheet was included in the audited consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2014 and filed with the United States Securities and Exchange Commission (the “SEC”) on March 10, 2015 (the “2014 Annual Report”), which includes all disclosures required by GAAP. Therefore, these unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2014 Annual Report. Principles of Consolidation The consolidated financial statements and footnotes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the 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 . 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 of submission to the credit card processor. As of June 30, 2015 and December 31, 2014, credit card receivables were $2.4 million and $1.2 million, respectively. As of June 30, 2015 and December 31, 2014, cash and cash equivalents held in bank accounts in foreign countries totaled $27.9 million and $24.8 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest bearing deposits. The Company also holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk. Restricted Cash The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) the Australia building lease collateral. As of June 30, 2015 and December 31, 2014, our total restricted cash was $8.8 million and $8.6 million, respectively. Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. Receivables are created upon shipment of an order if the credit card payment is rejected or does not match the order total. As of June 30, 2015 and December 31, 2014, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. For each of June 30, 2015 and December 31, 2014, the Company held an allowance for doubtful accounts of $0.2 million. Inventories Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost or market (using standard costs that approximate average costs). The Company periodically reviews inventories for obsolescence, and any inventories identified as obsolete are reserved or written off. Other Assets As of June 30, 2015 and December 31, 2014, other assets were $4.0 million and $3.6 million, respectively, and primarily consisted of deposits for building leases in various locations of $2.0 million and $1.5 million, respectively. Additionally, included in the June 30, 2015 and December 31, 2014 balances was $1.6 million and $1.7 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission to protect consumers who participate in network marketing activities. Also included in the June 30, 2015 and December 31, 2014 balances was $0.2 million of indefinite lived intangible assets relating to the Manapol® powder trademark. Other Long-Term Liabilities Other long-term liabilities were $2.2 million and $2.1 million as of June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015 and December 31, 2014, the Company recorded $0.8 million and $0.7 million, respectively, in other long-term liabilities related to uncertain income tax positions (see Note 8, Income Taxes Employee Benefit Plans, Revenue Recognition 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 June 30, 2015 and December 31, 2014 June 30, 2015 and December 31, 2014 June 30, 2015 and December 31, 2014 Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2014 $ 5,456 Loyalty points forfeited or expired (4,664 ) Loyalty points used (12,348 ) Loyalty points vested 19,580 Loyalty points unvested 1,679 Loyalty deferred revenue as of December 31, 2014 $ 9,703 Loyalty deferred revenue as of January 1, 2015 $ 9,703 Loyalty points forfeited or expired (5,310 ) Loyalty points used (7,123 ) Loyalty points vested 6,432 Loyalty points unvested 4,167 Loyalty deferred revenue as of June 30, 2015 $ 7,869 The Company estimates a sales return reserve for expected sales refunds based on 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 each period could be materially affected. Historically, sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale. Sales returns have historically averaged 1.5% or less of our gross sales. For the six months ended June 30, 2015 our sales return reserve consisted of the following (in thousands) Sales reserve as of January 1, 2015 $ 207 Provision related to sales made in current period 828 Adjustment related to sales made in prior periods (28 ) Actual returns or credits related to current period (632 ) Actual returns or credits related to prior periods (172 ) Sales reserve as of June 30, 2015 $ 203 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 both inbound and outbound freight as a component of cost of sales. Commissions and Incentives Associates earn commissions and incentives based on their direct and indirect commissionable net sales over 13 business periods each year. 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. Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income (loss) consists of the Company’s net income (loss), 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.

INVENTORIES

INVENTORIES	6 Months Ended
	Jun. 30, 2015
INVENTORIES [Abstract]
INVENTORIES	NOTE 2: INVENTORIES Inventories consist of raw materials and finished goods, which also includes promotional materials. The Company provides an allowance for any slow-moving or obsolete inventories. Inventories at June 30, 2015 and December 31, 2014, consisted of the following (in thousands) June 30, 2015 December 31, 2014 Raw materials $ 1,578 $ 2,118 Finished goods 14,467 10,615 Inventory reserves for obsolescence (1,798 ) (2,142 ) Total $ 14,247 $ 10,591

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2015
INCOME TAXES [Abstract]
INCOME TAXES	NOTE 3: INCOME TAXES For the three and six months ended June 30, 2015, the Company’s effective tax rate was 25.0% and 26.8% respectively. For the three and six months ended June 30, 2014, the Company’s effective income tax rate was 183.7% and 124.8%, respectively. For the three and six months ended June 30, 2015 and 2014, the Company’s effective tax rate was determined based on the estimated annual effective tax rate. The effective tax rates for the three and six months ended June 30, 2015 were lower than what would have been expected if the federal statutory rate were applied to income before taxes. Items decreasing the effective income tax rate include the favorable rate differences from foreign jurisdictions and release of valuation allowances associated with deferred tax assets of net operating loss carryforward. The effective tax rates for the three and six months ended June 30, 2014 were higher than what would have been expected if the federal statutory rate were 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 and the unfavorable rate differences from foreign jurisdictions. In addition, in the second quarter 2014, it was determined a deemed intercompany dividend had occurred in 2012 and 2013 related to an intercompany working capital loan that originated in 2012; the Company recorded the expense, which is not material to the financial statements for the year. We have not initiated any further intercompany transactions like the 2012 transaction, nor do we anticipate the need for further transactions of this type.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2015
EARNINGS PER SHARE [Abstract]
EARNINGS PER SHARE	NOTE 4: EARNINGS (LOSS) PER SHARE The Company calculates basic Earnings Per Share (“EPS”) by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards outstanding under the 2008 Stock Incentive Plan. In determining the potential dilution effect of outstanding stock options during the three months ended June 30, 2015 and 2014, the Company used the quarter’s average common stock close price of $20.08 and $15.13 per share, respectively. In determining the potential dilution effect of outstanding stock options during the six months ended June 30, 2015 and 2014, the Company used the six month average common stock close price of $20.71 and $15.93 per share, respectively. The Company reported net income for the three and six months ended June 30, 2015. For the three and six months ended June 30, 2015, approximately 0.1 million shares of the Company’s common stock subject to options were excluded from the diluted EPS calculation, as the effect would have been antidilutive.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2015
STOCK-BASED COMPENSATION [Abstract]
STOCK-BASED COMPENSATION	NOTE 5: STOCK-BASED COMPENSATION The Company currently has one active stock-based compensation plan, which was approved by shareholders. The Company grants stock options to employees, consultants, and board members at the fair market value of its common stock, on the date of grant, with a term no greater than ten years. The 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 100,000 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 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. At the 2014 Annual Shareholders’ Meeting, the 2008 Plan was amended again to increase the number of shares of common stock subject to the plan by 130,000. As of June 30, 2015, the 2008 Plan had 134,628 stock options available for grant before the plan expires on February 20, 2018. The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses. During the three months ended June 30, 2015 and 2014, the Company granted 20,000 and 15,000 stock options, respectively. The fair value of stock options granted during the three months ended June 30, 2015 ranged from $11.34 to $12.80 per share. During the six months ended June 30, 2015 and 2014, the Company granted 20,000 and 81,000 stock options, respectively. The fair value of stock options granted during the six months ended June 30, 2015 ranged from $11.34 to $12.80 per share. The Company recognized compensation expense as follows for the three and six months ended June 30 (in thousands) Three months ending June 30 Six months ending June 30 2015 2014 2015 2014 Total gross compensation expense $ 161 $ 124 $ 301 $ 302 Total tax benefit associated with compensation expense 43 30 86 90 Total net compensation expense $ 118 $ 94 $ 215 $ 212 As of June 30, 2015, the Company expects to record compensation expense in the future as follows (in thousands) Six months Year ending December 31, ending December 31, 2015 2016 2017 2018 Total gross unrecognized compensation expense $ 209 $ 262 $ 90 $ 23 Tax benefit associated with unrecognized compensation expense 46 40 12 6 Total net unrecognized compensation expense $ 163 $ 222 $ 78 $ 17

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2015
SHAREHOLDERS' EQUITY [Abstract]
SHAREHOLDERS' EQUITY	NOTE 6: SHAREHOLDERS’ EQUITY Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, displayed in the Consolidated Statement of Shareholders’ Equity and Comprehensive Loss, represents net loss plus the results of certain shareholders’ equity changes not reflected in the Consolidated Statements of Operations, such as foreign currency translation and certain pension and post-retirement benefit obligations. The after-tax components of accumulated other comprehensive loss, are as follows (in thousands) Foreign Currency Translation Pension Postretirement Benefit Obligation Accumulated Other Comprehensive Loss, Net Balance as of December 31, 2014 $ (457 ) $ 348 $ (109 ) Current-period change 1 (32 ) — (32 ) Balance as of June 30, 2015 $ (489 ) $ 348 $ (141 ) 1 No amounts reclassified from accumulated other comprehensive loss

LITIGATION

LITIGATION	6 Months Ended
	Jun. 30, 2015
LITIGATION [Abstract]
LITIGATION	NOTE 7: LITIGATION Patent Litigation Mannatech, Incorporated v. Wellness Quest, LLC and Harley Reginald McDaniel 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 the Defendants’ 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 its respective responsive brief. 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. Mediation on this matter was held on April 24, 2015. A settlement was not reached. On May 12, 2015 the Company received notice of an Order of Transfer advising that the case had been reassigned from Judge Ed Kinkeade to Judge David C. Godbey for all further proceedings. On July 20, 2015, the Court issued its Markman Mannatech, Incorporated v. RBC Life Sciences, Inc. and RBC Life Sciences USA, Inc,. On April 28, 2015 the Company filed a patent infringement lawsuit against RBC Life Sciences, Inc. and RBC Life Sciences USA, Inc. (“Defendants”) alleging the Defendants infringe 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. The Defendants filed their answer and have asserted counterclaims alleging, among other things, invalidity and non-infringement. On May 12, 2015 the Company received notice of an Order of Transfer advising that the case had been reassigned from Judge Ed Kinkeade to Judge David C. Godbey for all further proceedings. The parties filed the Case Management Report with the Court on June 24, 2015. The Company filed its answer to Defendants’ counterclaims on June 29, 2015. On July 28, 2015, the parties filed a Joint Motion for Entry of Final Judgment with the Court seeking the entry of a Final Judgment and Permanent Injunction (“Final Judgment”). Effective immediately under the proposed Final Judgment, the Defendants would be enjoined from making the infringing products in the United States; importing the infringing products into the United States; and marketing products marked with the trademarks VITALOE ® ® These lawsuits continue the Company’s enforcement of its patent rights, and the Company intends to vigorously prosecute these matters. Based on the previous successful patent infringement lawsuits against Country Life, LLC, Glycobiotics International, Inc., Techmedica Health, Inc., IonX Holdings, Inc., Boston Mountain Laboratories, Inc., Green Life, LLC, and Xiong Lo, 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. Breach of Contract Diana Anselmo and New Day Today Corporation v. Mannatech, Incorporated 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. The Company filed its answer on March 23, 2015 denying the Plaintiffs’ allegations. The Court set the case for trial on March 7, 2016. The Court has appointed a mediator and has ordered that mediation must be conducted no later than February 7, 2016. Trademark Opposition – U.S. Patent and Trademark Office (“USPTO”) United States Trademark Opposition No. 91221493, Shaklee Corporation v. Mannatech, Incorporated re: UTH On April 15, 2015 the Company received notice that Shaklee Corporation filed a Notice of Opposition to the Company’s trademark application for UTH (stylized as Ū th It is not possible at this time to predict the outcome of this USPTO action or whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter. However, the Company believes it has a valid defense and will vigorously defend this claim. This matter will remain open until it is resolved. Administrative Proceedings On April 12, 2015, Mannatech Korea, Ltd. filed a suit against the Busan Custom Office (“BCO”) to challenge BCO’s method of calculation regarding its assessment notice issued on July 11, 2013. The assessment notice included an audit of the Company’s imported goods covering fiscal years 2008 through 2012 and required the Company to pay $1.0 million for this assessment, which was paid in January 2014. No court date has been set. There are other ongoing audits in various international jurisdictions that the Company does not expect will have a material effect on our financial statements. Arbitration Proceeding Mannatech v. Samuel L. Caster and Wonder Enterprises, LLC, Demand for Arbitration On May 29, 2015 the Company initiated arbitration proceedings against Samuel L. Caster and Wonder Enterprises, LLC (“Respondents”) alleging breach of contract by Mr. Caster and his company, Wonder Enterprises, in a series of consulting agreements entered into by the parties. Mannatech seeks to recover actual damages, costs of court and prejudgment interest together with disgorgement of all benefits received by Caster. The Company estimates its damages to be between $500,000 and $3,500,000. On June 12, 2015 Respondents contacted the Company’s counsel to request mediation. The parties have agreed to mediate; mediation has been set for August 17, 2015. Litigation in General The Company is or may become subject to 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 or are 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

FAIR VALUE

FAIR VALUE	6 Months Ended
	Jun. 30, 2015
FAIR VALUE [Abstract]
FAIR VALUE	NOTE 8: FAIR VALUE The Company utilizes fair value measurements to record fair value adjustments to certain financial assets and to determine fair value disclosures. Fair Value Measurements and Disclosure · Level 1 – Quoted unadjusted prices for identical instruments in active markets. · Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. · Level 3 – Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. The primary objective of the Company’s investment activities is to preserve principal while maximizing yields without significantly increasing risk. The investment instruments held by the Company are money market funds and interest bearing deposits for which quoted market prices are readily available. The Company considers these highly liquid investments to be cash equivalents. These investments are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company does not have any material financial liabilities that were required to be measured at fair value on a recurring basis at June 30, 2015. The table below presents the recorded amount of financial assets measured at fair value (in thousands) June 30, 2015 Level 1 Level 2 Level 3 Total Assets Money Market Funds – Fidelity, US $ 18 $ — $ — $ 18 Interest bearing deposits – various banks 20,599 — — 20,599 Total assets $ 20,617 $ — $ — $ 20,617 Amounts included in: Cash and cash equivalents $ 13,774 $ — $ — $ 13,774 Restricted cash 6,843 — — 6,843 Total $ 20,617 $ — $ — $ 20,617 December 31, 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 assets $ 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

SEGMENT INFORMATION

SEGMENT INFORMATION	6 Months Ended
	Jun. 30, 2015
SEGMENT INFORMATION [Abstract]
SEGMENT INFORMATION	NOTE 9: 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, topical and skin care products, and weight-management 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 twelve 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, Mexico, Singapore and Hong Kong. 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); and (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 sales information for the three and six months ended June 30, are as follows (in millions, except percentages) Three months Six months Region 2015 2014 2015 2014 North America $ 18.8 40.3 % $ 20.9 45.1 % $ 36.9 40.5 % $ 41.2 46.1 % Asia/Pacific 23.6 50.5 % 21.4 46.3 % 46.3 50.8 % 40.4 45.3 % EMEA 4.3 9.2 % 4.0 8.6 % 7.9 8.7 % 7.7 8.6 % Totals $ 46.7 100.0 % $ 46.3 100.0 % $ 91.1 100.0 % $ 89.3 100.0 % Three months Six months 2015 2014 2015 2014 Consolidated product sales $ 36.3 $ 37.2 $ 70.5 $ 71.7 Consolidated pack sales 8.9 7.3 17.8 14.0 Consolidated other, including freight 1.5 1.8 2.8 3.6 Consolidated total net sales $ 46.7 $ 46.3 $ 91.1 $ 89.3 Long-lived assets, which include property, equipment and construction in progress for the Company and its subsidiaries, reside in the following regions in the following amounts (in millions) Region June 30, 2015 December 31, 2014 North America $ 3.8 $ 3.1 Asia/Pacific 1.0 0.8 EMEA 0.1 0.2 Total $ 4.9 $ 4.1 Inventory balances by region, which consist of raw materials, work in progress, finished goods, and promotional materials, as offset by obsolete inventories, were as follows (in millions) Region June 30, 2015 December 31, 2014 North America $ 5.1 $ 4.0 Asia/Pacific 6.5 4.3 EMEA 2.6 2.3 Total $ 14.2 $ 10.6

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2015
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 10: RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers Revenue Recognition. -Step 1: Identify the contract(s) with a customer. -Step 2: Identify the performance obligations in the contract. -Step 3: Determine the transaction price. -Step 4: Allocate the transaction price to the performance obligations in the contract. -Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The standard is effective for the Company for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures.) Early application is 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 2018. In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items In April 2015, the FASB issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software Intangibles – Goodwill and Other – Internal-Use Software In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory 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.

ORGANIZATION AND SUMMARY OF S18

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
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.
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 .
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 of submission to the credit card processor. As of June 30, 2015 and December 31, 2014, credit card receivables were $2.4 million and $1.2 million, respectively. As of June 30, 2015 and December 31, 2014, cash and cash equivalents held in bank accounts in foreign countries totaled $27.9 million and $24.8 million, respectively. The Company invests cash in liquid instruments, such as money market funds and interest bearing deposits. The Company also holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk.
Restricted Cash	Restricted Cash The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) the Australia building lease collateral. As of June 30, 2015 and December 31, 2014, our total restricted cash was $8.8 million and $8.6 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 June 30, 2015 and December 31, 2014, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. For each of June 30, 2015 and December 31, 2014, the Company held an allowance for doubtful accounts of $0.2 million.
Inventories	Inventories Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost or market (using standard costs that approximate average costs). The Company periodically reviews inventories for obsolescence, and any inventories identified as obsolete are reserved or written off.
Other Assets	Other Assets As of June 30, 2015 and December 31, 2014, other assets were $4.0 million and $3.6 million, respectively, and primarily consisted of deposits for building leases in various locations of $2.0 million and $1.5 million, respectively. Additionally, included in the June 30, 2015 and December 31, 2014 balances was $1.6 million and $1.7 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission to protect consumers who participate in network marketing activities. Also included in the June 30, 2015 and December 31, 2014 balances was $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 $2.2 million and $2.1 million as of June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015 and December 31, 2014, the Company recorded $0.8 million and $0.7 million, respectively, in other long-term liabilities related to uncertain income tax positions (see Note 8, Income Taxes Employee Benefit Plans,
Revenue Recognition and Deferred Commissions	Revenue Recognition 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 June 30, 2015 and December 31, 2014 June 30, 2015 and December 31, 2014 June 30, 2015 and December 31, 2014 Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2014 $ 5,456 Loyalty points forfeited or expired (4,664 ) Loyalty points used (12,348 ) Loyalty points vested 19,580 Loyalty points unvested 1,679 Loyalty deferred revenue as of December 31, 2014 $ 9,703 Loyalty deferred revenue as of January 1, 2015 $ 9,703 Loyalty points forfeited or expired (5,310 ) Loyalty points used (7,123 ) Loyalty points vested 6,432 Loyalty points unvested 4,167 Loyalty deferred revenue as of June 30, 2015 $ 7,869 The Company estimates a sales return reserve for expected sales refunds based on 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 each period could be materially affected. Historically, sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale. Sales returns have historically averaged 1.5% or less of our gross sales. For the six months ended June 30, 2015 our sales return reserve consisted of the following (in thousands) Sales reserve as of January 1, 2015 $ 207 Provision related to sales made in current period 828 Adjustment related to sales made in prior periods (28 ) Actual returns or credits related to current period (632 ) Actual returns or credits related to prior periods (172 ) Sales reserve as of June 30, 2015 $ 203
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 both inbound and outbound freight as a component of cost of sales.
Commissions and Incentives	Commissions and Incentives Associates earn commissions and incentives based on their direct and indirect commissionable net sales over 13 business periods each year. 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.
Comprehensive Income (loss) and Accumulated Other Comprehensive Income (loss)	Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income (loss) consists of the Company’s net income (loss), 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.

ORGANIZATION AND SUMMARY OF S19

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2015
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Loyalty deferred revenue	Deferred commissions were $4.2 million and $4.5 million at June 30, 2015 and December 31, 2014 Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2014 $ 5,456 Loyalty points forfeited or expired (4,664 ) Loyalty points used (12,348 ) Loyalty points vested 19,580 Loyalty points unvested 1,679 Loyalty deferred revenue as of December 31, 2014 $ 9,703 Loyalty deferred revenue as of January 1, 2015 $ 9,703 Loyalty points forfeited or expired (5,310 ) Loyalty points used (7,123 ) Loyalty points vested 6,432 Loyalty points unvested 4,167 Loyalty deferred revenue as of June 30, 2015 $ 7,869
Sales return reserve	For the six months ended June 30, 2015 our sales return reserve consisted of the following (in thousands) Sales reserve as of January 1, 2015 $ 207 Provision related to sales made in current period 828 Adjustment related to sales made in prior periods (28 ) Actual returns or credits related to current period (632 ) Actual returns or credits related to prior periods (172 ) Sales reserve as of June 30, 2015 $ 203

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2015
INVENTORIES [Abstract]
Schedule of inventory	Inventories at June 30, 2015 and December 31, 2014, consisted of the following (in thousands) June 30, 2015 December 31, 2014 Raw materials $ 1,578 $ 2,118 Finished goods 14,467 10,615 Inventory reserves for obsolescence (1,798 ) (2,142 ) Total $ 14,247 $ 10,591

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2015
STOCK-BASED COMPENSATION [Abstract]
Schedule of compensation cost	The Company recognized compensation expense as follows for the three and six months ended June 30 (in thousands) Three months ending June 30 Six months ending June 30 2015 2014 2015 2014 Total gross compensation expense $ 161 $ 124 $ 301 $ 302 Total tax benefit associated with compensation expense 43 30 86 90 Total net compensation expense $ 118 $ 94 $ 215 $ 212
Schedule of unrecognized compensation expense	As of June 30, 2015, the Company expects to record compensation expense in the future as follows (in thousands) Six months Year ending December 31, ending December 31, 2015 2016 2017 2018 Total gross unrecognized compensation expense $ 209 $ 262 $ 90 $ 23 Tax benefit associated with unrecognized compensation expense 46 40 12 6 Total net unrecognized compensation expense $ 163 $ 222 $ 78 $ 17

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2015
SHAREHOLDERS' EQUITY [Abstract]
Components of accumulated other comprehensive loss	The after-tax components of accumulated other comprehensive loss, are as follows (in thousands) Foreign Currency Translation Pension Postretirement Benefit Obligation Accumulated Other Comprehensive Loss, Net Balance as of December 31, 2014 $ (457 ) $ 348 $ (109 ) Current-period change 1 (32 ) — (32 ) Balance as of June 30, 2015 $ (489 ) $ 348 $ (141 ) 1 No amounts reclassified from accumulated other comprehensive loss

FAIR VALUE (Tables)

FAIR VALUE (Tables)	6 Months Ended
	Jun. 30, 2015
FAIR VALUE [Abstract]
Fair value, assets measured on recurring basis	The table below presents the recorded amount of financial assets measured at fair value (in thousands) June 30, 2015 Level 1 Level 2 Level 3 Total Assets Money Market Funds – Fidelity, US $ 18 $ — $ — $ 18 Interest bearing deposits – various banks 20,599 — — 20,599 Total assets $ 20,617 $ — $ — $ 20,617 Amounts included in: Cash and cash equivalents $ 13,774 $ — $ — $ 13,774 Restricted cash 6,843 — — 6,843 Total $ 20,617 $ — $ — $ 20,617 December 31, 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 assets $ 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

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2015
SEGMENT INFORMATION [Abstract]
Net sales shipped to customers by geographic region	Consolidated net sales shipped to customers in these regions, along with pack and product sales information for the three and six months ended June 30, are as follows (in millions, except percentages) Three months Six months Region 2015 2014 2015 2014 North America $ 18.8 40.3 % $ 20.9 45.1 % $ 36.9 40.5 % $ 41.2 46.1 % Asia/Pacific 23.6 50.5 % 21.4 46.3 % 46.3 50.8 % 40.4 45.3 % EMEA 4.3 9.2 % 4.0 8.6 % 7.9 8.7 % 7.7 8.6 % Totals $ 46.7 100.0 % $ 46.3 100.0 % $ 91.1 100.0 % $ 89.3 100.0 %
Product and pack information	Three months Six months 2015 2014 2015 2014 Consolidated product sales $ 36.3 $ 37.2 $ 70.5 $ 71.7 Consolidated pack sales 8.9 7.3 17.8 14.0 Consolidated other, including freight 1.5 1.8 2.8 3.6 Consolidated total net sales $ 46.7 $ 46.3 $ 91.1 $ 89.3
Long-lived assets, by geographic region	Long-lived assets, which include property, equipment and construction in progress for the Company and its subsidiaries, reside in the following regions in the following amounts (in millions) Region June 30, 2015 December 31, 2014 North America $ 3.8 $ 3.1 Asia/Pacific 1.0 0.8 EMEA 0.1 0.2 Total $ 4.9 $ 4.1
Inventory balances, by region	Inventory balances by region, which consist of raw materials, work in progress, finished goods, and promotional materials, as offset by obsolete inventories, were as follows (in millions) Region June 30, 2015 December 31, 2014 North America $ 5.1 $ 4.0 Asia/Pacific 6.5 4.3 EMEA 2.6 2.3 Total $ 14.2 $ 10.6

ORGANIZATION AND SUMMARY OF S25

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015USD ($)RegionPeriod	Dec. 31, 2014USD ($)
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Number of regions in which company sells products | Region	3
Cash and Cash Equivalents [Abstract]
Credit card receivables	$ 2,400	$ 1,200
Cash and cash equivalents held in foreign bank accounts	27,900	24,800
Restricted Cash [Abstract]
Restricted cash	8,800	8,600
Accounts Receivable [Abstract]
Allowance for doubtful accounts	200	200
Other Assets [Abstract]
Other assets	4,033	3,567
Deposits for building leases	2,000	1,500
Fair trade commission deposits	1,600	1,700
Indefinite lived intangible assets	200	200
Other Long-Term Liabilities [Abstract]
Other long-term liabilities	2,167	2,136
Uncertain income tax position	800	700
Accrued lease restoration costs	400	400
Estimated defined benefit obligation related to a non-U.S. defined benefit plan for its Japan operations	600	600
Revenue Recognition and Deferred Commissions [Abstract]
Deferred revenue	9,770	10,890
Deferred revenue associated loyalty program	7,900	9,700
Deferred commissions	4,152	4,544
Loyalty Program [Abstract]
Loyalty deferred revenue, beginning balance	9,703	5,456
Loyalty points forfeited or expired	(5,310)	(4,664)
Loyalty points used	(7,123)	(12,348)
Loyalty points vested	6,432	19,580
Loyalty points unvested	4,167	1,679
Loyalty deferred revenue, ending balance	$ 7,869	9,703
Percentage of sale returns (in hundredths)	1.50%
Commissions and Incentives [Abstract]
Number of business periods per year | Period	13
Number of days per business period	28 days
Number of weeks following business period end for payment of product sales commissions
Number of weeks following business period end for payment of pack sales commissions
Reserve for Sales Returns [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Sales reserve, beginning of year	$ 207
Provision related to sales made in current period	828
Adjustment related to sales made in prior periods	(28)
Actual returns or credits related to current period	(632)
Actual returns or credits related to prior periods	(172)
Sales reserve, end of period	$ 203	$ 207

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
INVENTORIES [Abstract]
Raw materials	$ 1,578	$ 2,118
Finished goods	14,467	10,615
Inventory reserves for obsolescence	(1,798)	(2,142)
Total	$ 14,247	$ 10,591

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
INCOME TAXES [Abstract]
Effective tax rate (in hundredths)	25.00%	183.70%	26.80%	124.80%

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - $ / shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Average common stock close price (in dollars per share)	$ 20.08	$ 15.13	$ 20.71	$ 15.93
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	0.1	0.1

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)$ / sharesshares	Jun. 30, 2014USD ($)shares	Jun. 30, 2015USD ($)Plan$ / sharesshares	Jun. 30, 2014USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of active stock based compensation plan | Plan			1
Options granted (in shares) | shares	20,000	15,000	20,000	81,000
Share-based compensation expense [Abstract]
Total gross compensation expense	$ 161	$ 124	$ 301	$ 302
Total tax benefit associated with compensation expense	43	30	86	90
Total net compensation expense	118	$ 94	215	$ 212
Unrecognized compensation expense [Abstract]
Total gross unrecognized compensation expense to be recognized over remainder of current fiscal year	209		209
Total gross unrecognized compensation expense in 2016	262		262
Total gross unrecognized compensation expense in 2017	90		90
Total gross unrecognized compensation expense in 2018	23		23
Tax benefit associated with unrecognized compensation expense remainder of current fiscal year	46		46
Tax benefit associated with unrecognized compensation expense in 2016	40		40
Tax benefit associated with unrecognized compensation expense in 2017	12		12
Tax benefit associated with unrecognized compensation expense in 2018	6		6
Total net unrecognized compensation expense	163		163
Total net unrecognized compensation expense in 2016	222		222
Total net unrecognized compensation expense in 2017	78		78
Total net unrecognized compensation expense in 2018	$ 17		$ 17
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of stock options			2 years
Percentages of stock option ownership considered for higher exercise price of option (in hundredths)			10.00%
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 11.34		$ 11.34
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option contract term			10
Vesting period of stock options			3 years
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
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 12.80		$ 12.80
2008 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares) | shares	100,000		100,000
Increase in number of shares authorized (in shares) | shares			100,000	130,000
Number of shares available for grant (in shares) | shares	134,628		134,628
Expiration date of stock option plan			Feb. 20, 2018

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) $ in Thousands		6 Months Ended
		Jun. 30, 2015USD ($)
Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		$ (109)
Current-period change	[1]	(32)
Ending balance		(141)
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		(457)
Current-period change	[1]	(32)
Ending balance		(489)
Pension Postretirement Benefit Obligation [Member]
Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		348
Current-period change	[1]	0
Ending balance		$ 348
[1]	No amounts reclassified from accumulated other comprehensive loss

LITIGATION (Details)

LITIGATION (Details) - USD ($)	Feb. 18, 2015	Jan. 31, 2014	May. 29, 2015
Ms. Diana Anselmo and New Day Today Corporation [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Damages sought	$ 1,000,000
Busan Custom Office [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Damages paid		$ 1,000,000
Samuel L. Caster and Wonder Enterprises, LLC [Member]
Loss Contingencies [Line Items]
Minimum estimated damages			$ 500,000
Maximum estimated damages			$ 3,500,000

FAIR VALUE (Details)

FAIR VALUE (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash	$ 8,800	$ 8,600
Recurring Basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds - Fidelity, US	18	392
Interest bearing deposits - various banks	20,599	12,322
Cash and cash equivalents	13,774	6,159
Restricted cash	6,843	738
Long-term restricted cash		5,817
Total	20,617	12,714
Recurring Basis [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds - Fidelity, US	18	392
Interest bearing deposits - various banks	20,599	12,322
Cash and cash equivalents	13,774	6,159
Restricted cash	6,843	738
Long-term restricted cash		5,817
Total	20,617	12,714
Recurring Basis [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds - Fidelity, US	0	0
Interest bearing deposits - various banks	0	0
Cash and cash equivalents	0	0
Restricted cash	0	0
Long-term restricted cash		0
Total	0	0
Recurring Basis [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds - Fidelity, US	0	0
Interest bearing deposits - various banks	0	0
Cash and cash equivalents	0	0
Restricted cash	0	0
Long-term restricted cash		0
Total	$ 0	$ 0

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)Country	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)RegionSegmentCountry	Jun. 30, 2014USD ($)	Dec. 31, 2014USD ($)
SEGMENT INFORMATION [Abstract]
Number of operating segments | Segment			1
Number of countries in which entity network marketing and distribution channels operates | Country			24
Minimum percentage of revenue considered for accounted of major customer (in hundredths)			10.00%
Number of countries in which company operates facilities | Country	12		12
Number of countries in which company sells products | Country			24
Number of regions in which company sells products | Region			3
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	$ 46,700	$ 46,300	$ 91,100	$ 89,300
Percent of total revenue (in hundredths)	100.00%	100.00%	100.00%	100.00%
Long-lived assets by regions [Abstract]
Long-lived assets	$ 4,900		$ 4,900		$ 4,100
Inventory, by Country [Abstract]
Inventories, net	14,247		14,247		10,591
Reportable Geographical Components [Member] | North America [Member]
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	$ 18,800	$ 20,900	$ 36,900	$ 41,200
Percent of total revenue (in hundredths)	40.30%	45.10%	40.50%	46.10%
Long-lived assets by regions [Abstract]
Long-lived assets	$ 3,800		$ 3,800		3,100
Inventory, by Country [Abstract]
Inventories, net	5,100		5,100		4,000
Reportable Geographical Components [Member] | Asia/Pacific [Member]
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	$ 23,600	$ 21,400	$ 46,300	$ 40,400
Percent of total revenue (in hundredths)	50.50%	46.30%	50.80%	45.30%
Long-lived assets by regions [Abstract]
Long-lived assets	$ 1,000		$ 1,000		800
Inventory, by Country [Abstract]
Inventories, net	6,500		6,500		4,300
Reportable Geographical Components [Member] | EMEA [Member]
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	$ 4,300	$ 4,000	$ 7,900	$ 7,700
Percent of total revenue (in hundredths)	9.20%	8.60%	8.70%	8.60%
Long-lived assets by regions [Abstract]
Long-lived assets	$ 100		$ 100		200
Inventory, by Country [Abstract]
Inventories, net	2,600		2,600		$ 2,300
Consolidated Product Sales [Member]
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	36,300	$ 37,200	70,500	$ 71,700
Consolidated Pack Sales [Member]
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	8,900	7,300	17,800	14,000
Consolidated Other, Including Freight [Member]
Revenue from External Customer [Line Items]
Consolidated net sales shipped to customers	$ 1,500	$ 1,800	$ 2,800	$ 3,600