Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
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 | 2,686,868 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 |
CONSOLIDATED BALANCE SHEETS - (
CONSOLIDATED BALANCE SHEETS - (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 38,311 | $ 31,994 |
Restricted cash | 1,513 | 1,511 |
Accounts receivable, net of allowance of $456 and $261 in 2016 and 2015, respectively | 72 | 369 |
Income tax receivable | 16 | 4 |
Inventories, net | 10,394 | 9,199 |
Prepaid expenses and other current assets | 2,919 | 2,905 |
Deferred commissions | 3,742 | 3,443 |
Deferred tax assets, net | 27 | 460 |
Total current assets | 56,994 | 49,885 |
Property and equipment, net | 3,670 | 3,848 |
Construction in progress | 926 | 839 |
Long-term restricted cash | 7,040 | 6,586 |
Other assets | 4,451 | 3,759 |
Long-term deferred tax assets, net | 4,708 | 3,725 |
Total assets | 77,789 | 68,642 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current portion of capital leases | 379 | 447 |
Accounts payable | 5,188 | 2,683 |
Accrued expenses | 5,112 | 6,221 |
Commissions and incentives payable | 11,277 | 6,818 |
Taxes payable | 538 | 736 |
Current deferred tax liability | 85 | 84 |
Current notes payable | 805 | 713 |
Deferred revenue | 9,640 | 8,677 |
Total current liabilities | 33,024 | 26,379 |
Capital leases, excluding current portion | 346 | 612 |
Long-term deferred tax liabilities | 26 | 24 |
Long-term notes payable | 706 | 1,069 |
Other long-term liabilities | 1,648 | 1,994 |
Total liabilities | 35,750 | 30,078 |
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, 2,764,963 shares issued and 2,686,868 shares outstanding as of September 30, 2016 and 2,773,972 shares issued and 2,682,078 shares outstanding as of December 31, 2015 | 0 | 0 |
Additional paid-in capital | 39,164 | 40,494 |
Retained earnings | 8,798 | 8,589 |
Accumulated other comprehensive income | 3,597 | 686 |
Treasury stock, at average cost, 78,095 shares as of September 30, 2016 and 91,894 shares as of December 31, 2015, respectively | (9,520) | (11,205) |
Total shareholders' equity | 42,039 | 38,564 |
Total liabilities and shareholders' equity | $ 77,789 | $ 68,642 |
CONSOLIDATED BALANCE SHEETS - 3
CONSOLIDATED BALANCE SHEETS - (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Accounts receivable, allowance for doubtful accounts | $ 456 | $ 261 |
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) | 2,764,963 | 2,773,972 |
Common stock, shares outstanding (in shares) | 2,686,868 | 2,682,078 |
Treasury stock, shares (in shares) | 78,095 | 91,894 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) [Abstract] | ||||
Net sales | $ 48,146 | $ 43,860 | $ 137,664 | $ 134,956 |
Cost of sales | 9,736 | 8,253 | 28,225 | 25,076 |
Gross profit | 38,410 | 35,607 | 109,439 | 109,880 |
Operating expenses: | ||||
Commissions and incentives | 19,985 | 17,867 | 56,019 | 54,296 |
Selling and administrative expenses | 9,877 | 9,001 | 28,199 | 26,412 |
Depreciation and amortization expense | 507 | 433 | 1,427 | 1,324 |
Other operating costs | 7,534 | 6,072 | 22,863 | 18,493 |
Total operating expenses | 37,903 | 33,373 | 108,508 | 100,525 |
Income from operations | 507 | 2,234 | 931 | 9,355 |
Interest income (expense) | (16) | 93 | (5) | 154 |
Other income (expense), net | 232 | (2,418) | (471) | (3,802) |
Income (loss) before income taxes | 723 | (91) | 455 | 5,707 |
Benefit (provision) for income taxes | 562 | 159 | 90 | (1,397) |
Net income | $ 1,285 | $ 68 | $ 545 | $ 4,310 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.03 | $ 0.20 | $ 1.61 |
Diluted (in dollars per share) | $ 0.46 | $ 0.03 | $ 0.19 | $ 1.58 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 2,706 | 2,681 | 2,703 | 2,679 |
Diluted (in shares) | 2,818 | 2,721 | 2,812 | 2,727 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - (UNAUDITED) [Abstract] | ||||
Net income | $ 1,285 | $ 68 | $ 545 | $ 4,310 |
Foreign currency translations | 1,407 | 464 | 2,911 | 432 |
Comprehensive income | $ 2,692 | $ 532 | $ 3,456 | $ 4,742 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - (UNAUDITED) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Common Stock Par Value [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] | Total |
Beginning balance at Dec. 31, 2015 | $ 0 | $ 40,494 | $ 8,589 | $ 686 | $ (11,205) | $ 38,564 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 545 | 0 | 0 | 545 |
Declared dividends | 0 | 0 | (336) | 0 | 0 | (336) |
Charge related to stock-based compensation | 0 | (356) | 0 | 0 | 830 | 474 |
Stock option exercises | 0 | (815) | 0 | 0 | 855 | 40 |
Repurchase of common stock | 0 | (159) | 0 | 0 | 0 | (159) |
Foreign currency translations | 0 | 0 | 0 | 2,911 | 0 | 2,911 |
Ending balance at Sep. 30, 2016 | $ 0 | $ 39,164 | $ 8,798 | $ 3,597 | $ (9,520) | $ 42,039 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 545 | $ 4,310 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,427 | 1,324 |
Provision for inventory losses | 208 | 434 |
Provision for doubtful accounts | 516 | 275 |
Loss on disposal of assets | 415 | 28 |
Stock-based compensation expense | 474 | 450 |
Tax benefit from exercise of stock options | 0 | (16) |
Deferred income taxes | (401) | 6 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (213) | (77) |
Income tax receivable | (11) | (16) |
Inventories | (903) | (1,730) |
Prepaid expenses and other current assets | 306 | 655 |
Other assets | (183) | (138) |
Deferred commissions | (171) | 230 |
Accounts payable | 2,457 | 116 |
Accrued expenses and other liabilities | (1,771) | 633 |
Taxes payable | (376) | (637) |
Commissions and incentives payable | 4,184 | 2,174 |
Deferred revenue | 664 | (210) |
Change in restricted cash | (17) | 26 |
Net cash provided by operating activities | 7,150 | 7,837 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (1,676) | (1,583) |
Net cash used in investing activities | (1,676) | (1,583) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from stock options exercised | 40 | 30 |
Repurchase of common stock | (159) | 0 |
Payment of cash dividends | (336) | 0 |
Tax benefit from exercise of stock options | 0 | 16 |
Proceeds from note payable | 0 | 1,148 |
Repayment of capital lease obligations | (1,136) | (1,276) |
Net cash used in financing activities | (1,591) | (82) |
Effect of currency exchange rate changes on cash and cash equivalents | 2,434 | 1,121 |
Net increase in cash and cash equivalents | 6,317 | 7,293 |
Cash and cash equivalents at the beginning of the period | 31,994 | 27,999 |
Cash and cash equivalents at the end of the period | 38,311 | 35,292 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Income taxes paid | 1,830 | 4,394 |
Interest paid on capital leases and financing arrangements | 90 | 69 |
Assets acquired through financing arrangements | $ 529 | $ 671 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
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) the Americas (the United States, Canada, Colombia and Mexico); (ii) Europe/the 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, 2015 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, 2015 and filed with the United States Securities and Exchange Commission (the “SEC”) on March 15, 2016 (the “2015 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 2015 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 September 30, 2016 and December 31, 2015, credit card receivables were $1.9 million and $0.4 million, respectively. As of September 30, 2016 and December 31, 2015, cash and cash equivalents held in bank accounts in foreign countries totaled $33.8 million and $31.3 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 September 30, 2016 and December 31, 2015, our total restricted cash was $ 8.6 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 each of September 30, 2016 and December 31, 2015, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. At September 30, 2016 and December 31, 2015, the Company held an allowance for doubtful accounts of $ 0.5 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. On August 29, 2016, we received information indicating that a portion of the capitalized costs related to an item included in our computer hardware and software asset group would not be completed due to problems with the vendor in completing the code. We evaluated the project and determined a charge was required due to the abandonment of the project. For the quarter and year ending September 30, 2016 we recorded $0.4 million in operating expenses that represented work that was performed, but which no longer has any value to the Company or any possibility of affecting future cash inflows. Other Assets As of September 30, 2016 and December 31, 2015, other assets were $ 4.5 2.5 1.7 Notes Payable Notes payable were $ 1.5 0.8 0.7 Other Long-Term Liabilities Other long-term liabilities were $ 1.6 Income Taxes 0.5 0.5 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 September 30, 2016 and December 31, 2015 9.6 September 30, 2016 and December 31, 2015 8.0 3.7 September 30, 2016 and December 31, 2015 Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2015 $ 9,703 Loyalty points forfeited or expired (8,801 ) Loyalty points used (15,077 ) Loyalty points vested 20,403 Loyalty points unvested 1,845 Loyalty deferred revenue as of December 31, 2015 $ 8,073 Loyalty deferred revenue as of January 1, 2016 $ 8,073 Loyalty points forfeited or expired (5,334 ) Loyalty points used ( 11,879 ) Loyalty points vested 15,556 Loyalty points unvested 1,559 Loyalty deferred revenue as of September 30, 2016 $ 7,975 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 nine months ended September 30, 2016 our sales return reserve consisted of the following (in thousands) Sales reserve as of January 1, 2016 $ 147 Provision related to sales made in current period 1,026 Adjustment related to sales made in prior periods 7 Actual returns or credits related to current period ( 872 ) Actual returns or credits related to prior periods ( 145 ) Sales reserve as of September 30, 2016 $ 163 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. 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 and Accumulated Other Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Denmark, Norway, Sweden, Colombia, and Mexico operations, and changes in the pension obligation for its Japanese employees. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2016 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 2: INVENTORIES Inventories consist of raw materials, finished goods, and promotional materials. The Company provides an allowance for any slow-moving or obsolete inventories. Inventories at September 30, 2016 and December 31, 2015, consisted of the following (in thousands) September 30, 2016 December 31, 2015 Raw materials $ 537 $ 1,187 Finished goods 10,581 9,277 Inventory reserves for obsolescence ( 724 ) (1,265 ) Total $ 10,394 $ 9,199 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 3: INCOME TAXES For the three and nine months ended September 30, 2016, the Company’s effective tax rate was (77.7)% and (19.8)%, respectively. Taxes for the nine months ended September 30, 2016 were a $0.1 million benefit on a $0.5 million pre-tax book income mainly due to fluctuation of income between quarters The effective tax rates for the three and nine months ended September 30, 2016 were lower than what would have been expected if the U.S. federal statutory rate were applied to income before taxes. Items decreasing the effective income tax rate include the favorable rate differences from foreign jurisdictions, fluctuation of income between quarters resulting in a The effective tax rates for the three months ended September 30, 2015 were higher than what would have been expected if the federal statutory rate were applied to income before taxes. Items increasing the effective tax rate include a return to provision adjustment offset by favorable rate differences from foreign jurisdictions and the utilization of foreign income tax credit. The effective tax rates for the nine months ended September 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 due to the overall profitability |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 4: EARNINGS PER SHARE The Company calculates basic Earnings Per Share (“EPS”) by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards outstanding under the 2008 Stock Incentive Plan. In determining the potential dilution effect of outstanding stock options during the three months ended September 30, 2016 and 2015, the Company used the quarter’s average common stock closing price of $18.02 and $18.13 per share, respectively. In determining the potential dilution effect of outstanding stock options during the nine months ended September 30, 2016 and 2015, the Company used the nine-month average common stock closing price of $19.12 and $19.83 per share, respectively. For the three- and nine-months ended September 30, 2016, approximately 0.1 million shares of the Company’s stock subject to options were excluded from the diluted EPS calculation as their effect would have been antidilutive. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
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, as amended (the “2008 Plan”), which reserved up to 100,000 (as adjusted for a 1-for-10 reverse stock split) shares of common stock for issuance of stock options and restricted stock to our employees, board members, and consultants, plus any shares reserved under the Company’s then-existing, unexpired stock plans for which options had not yet been issued, and any shares underlying outstanding options under the then-existing stock option plans that terminate without having been exercised in full. The 2008 Plan was approved by the Company’s shareholders at the 2008 Annual Shareholders’ Meeting and was amended at the 2012 Annual Shareholders’ Meeting to increase the number of shares of common stock subject to the plan by 100,000 and amended again at the 2014 Annual Shareholders’ Meeting to increase the number of shares of common stock subject to the plan by an additional 130,000. As of September 30, 2016, the 2008 Plan had 85,397 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 September 30, 2016 and 2015, the Company granted zero and 12,000 stock options, respectively. The fair value of stock options granted during the three months ended September 30, 2015 was approximately $10.36 per share. During the nine months ended September 30, 2016 and 2015, the Company granted 10,000 and 32,000 stock options, respectively. The fair value of stock options granted during the nine months ended September 30, 2016 was approximately $12.18 per share. The Company recognized compensation expense as follows for the three and nine months ended September 30 (in thousands) Three months ending September 30 Nine months ending September 30 2016 2015 2016 2015 Total gross compensation expense $ 115 $ 149 $ 474 $ 450 Total tax benefit associated with compensation expense 15 38 62 111 Total net compensation expense $ 100 $ 111 $ 412 $ 339 As of September 30, 2016, the Company expects to record compensation expense in the future as follows (in thousands) Three months Year ending December 31, ending December 31, 2016 2017 2018 2019 Total gross unrecognized compensation expense $ 106 $ 297 $ 91 $ 29 Tax benefit associated with unrecognized compensation expense 14 33 7 — Total net unrecognized compensation expense $ 92 $ 264 $ 84 $ 29 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 6: SHAREHOLDERS’ EQUITY 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 the 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. On August 31, 2016, the Company’s Board of Directors reactivated the August 2006 Plan and authorized the Company to repurchase up to $0.5 million of the Company’s outstanding common shares in open market transactions. As of November 8, 2016, the maximum number of shares available for repurchase under the June 2004 Plan was 19,084, and the total number of shares purchased in the open market under the June 2004 Plan was 112,672. As of November 8, 2016, there was $19.8 million remaining for repurchase under the August 2006 Plan, and the total value of shares repurchased in the open market under the August 2006 plan was $0.2 million. The Company does not have any stock repurchase plans or programs other than the June 2004 Plan and the August 2006 Plan. During the three and nine months ended September 30, 2016, the company repurchased 9,009 shares at an average price of $17.54. Accumulated Other Comprehensive Income Accumulated other comprehensive income, displayed in the Consolidated Statements of Shareholders’ Equity and Comprehensive Income, represents net income plus the results of certain shareholders’ equity changes not reflected in the Consolidated Statements of Operations, such as foreign currency translation and certain pension and post-retirement benefit obligations. The after-tax components of accumulated other comprehensive income, are as follows (in thousands) Foreign Currency Translation Pension Postretirement Benefit Obligation Accumulated Other Comprehensive Income, Net Balance as of December 31, 2015 $ 358 $ 328 $ 686 Current-period change 1 2,911 — 2,911 Balance as of September 30, 2016 $ 3,269 $ 328 $ 3,597 1 No amounts reclassified from accumulated other comprehensive income. Dividends On August 11, 2016, the Board of Directors declared a dividend of $0.125 per share that was paid on September 21, 2016 to shareholders of record on August 31, 2016. |
LITIGATION
LITIGATION | 9 Months Ended |
Sep. 30, 2016 | |
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 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 On November 5, 2015 the Court issued an Order accepting Defendants’ stipulation of infringement under the Court’s claim interpretation and granted the Company’s partial motion for summary judgment and issued a permanent injunction against Defendants’ infringement of the Patents. The Court stayed the permanent injunction until the conclusion of Defendants’ appeal to the U.S. Court of Appeals for the Federal Circuit (the “Court of Appeals”). On December 3, 2015, Defendants filed their Notice of Appeal which was docketed by the Court of Appeals on December 8, 2015. Defendants-Appellants filed their brief with the Court of Appeals on February 28, 2016. The Company-Appellee filed its brief with the Court of Appeals on March 24, 2016. Oral argument for the appeal was held on August 1, 2016. Each side was given fifteen minutes for argument before the Appellate Court. On August 5, 2016, the Court of Appeals issued a per curium 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, Xiong Lo, and RBC Life Sciences, Inc., 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; however, on December 7, 2015 the Court granted the parties Agreed Motion for Continuation and reset the trial for September 26, 2016. At a hearing on August 19, 2016, the Court granted a continuance and reset the trial for November 14, 2016, and on October 18, 2016, the Court reset the trial for December 5, 2016. The Court issued a mediation order on April 20, 2015. The Company filed a Motion for Summary Judgment on June 15, 2016. The Mediation was conducted on June 17, 2016. The parties entered into a Mediation Settlement Agreement (“MSA”) that was contingent upon Plaintiff Anselmo reaching an acceptable compromise and settlement with the Internal Revenue Service (“IRS”) on or before July 18, 2016. On July 11, 2016, the Company was notified that Plaintiff Anselmo did not reach an acceptable compromise with the IRS, thus making the MSA null and void. Plaintiffs filed their response to the Company’s Motion for Summary Judgment on August 5, 2016. The hearing on that motion was held on August 11, 2016 and due to time constraints was continued on August 19, 2016. On August 31, 2016 the Court entered an Order Denying the Company’s Motion for Summary Judgment. Discovery formally closed on October 7, 2016. At a hearing on October 10, 2016, the Company argued that it should be allowed further discovery related to the assertions by Plaintiff Anselmo that she was not legally married to Mr. Gebauer both before and after the Company and Plaintiff Anselmo entered into the contract at issue. The Court ordered Plaintiffs to produce communications with the IRS regarding Plaintiff Anselmo’s relationship to Mr. Gebauer. It is not possible at this time to predict whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter. However, the Company believes it has a valid defense and will vigorously defend this claim. This matter remains open. Uniscience Solution v. Chang, et al.; Chang, et al. v. Uniscience Solution, Randy Lee, and Mannatech, Inc. (cross-defendant), On June 1, 2016 the Company received notice that on May 20, 2016 Vivian Hsiaoling Chang and Alan Jyh Woei Hsu (collectively, the “Cross-plaintiffs”) filed an unverified cross-complaint against the Company and Uniscience Solution, and Randy Lee alleging breach of contract seeking $22,300 plus unspecified special and punitive damages in addition to attorneys’ fees and related costs. Cross-plaintiffs, Uniscience Solution, and Randy Lee are independent distributors of the Company who entered into an agreement, separate and apart from their respective distributor agreements with the Company. The Cross-plaintiffs assert that Mannatech is a party to such other agreement; which it is not. The Company filed an answer denying the assertions in the unverified cross-complaint. On September 23, 2016, the Cross-plaintiffs and Uniscience Solution entered into a settlement agreement. On September 27, 2016, the Cross-plaintiffs filed a Request for Dismissal with the Court dismissing all claims against the Company with prejudice. On October 26, 2016, the Company received notice from its counsel that the Court entered the Dismissal on October 3, 2016. This matter is closed. 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 On September 15, 2015 Shaklee filed two more Notices of Opposition for the UTH & Design and ŪTH applications. The Company filed Answers and It is not possible at this time to predict the outcome of the 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. Arbitration Proceeding Mannatech v. Samuel L. Caster and Wonder Enterprises, LLC, Demand for Arbitration, Case No. 01-15-0003-6812. On May 29, 2015 the Company initiated arbitration proceedings against Samuel L. Caster and Wonder Enterprises, LLC (“Respondents”) alleging breach of contract by Mr. Caster and his company, Wonder Enterprises, under 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 the Respondents. 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 agreed to mediate this dispute, and mediation was held on August 17, 2015. However, a settlement was not reached. A preliminary hearing for arbitration was held on September 18, 2015, and a final hearing commenced on April 25, 2016. A hearing was held on March 2, 2016 where the arbitrator granted Respondents’ request to file a motion for summary judgment and granted the Company until March 21, 2016 to issue its response. The arbitrator also granted the Company’s motion to compel the Respondents to produce the customer list for Mr. Caster’s former company, EM Squared. The Company filed its response to Respondents’ Motion for Summary Judgment on March 21, 2016. The arbitration hearing was scheduled to begin on August 29, 2016; however, the parties reached a settlement agreement and on August 25, 2016 the arbitrator entered the Agreed Order of Dismissal, dismissing all claims with prejudice. This matter is closed. Administrative Proceedings Mannatech Korea, Ltd. V. Busan Custom Office, Busan District Court, Korea On or before April 12, 2015 Mannatech Korea, Ltd. filed a suit against the Busan Custom Office (“BCO”) to challenge BCO’s method of calculation regarding its assessment notice issued on July 11, 2013. The assessment notice included an audit of the Company’s imported goods covering fiscal years 2008 through 2012 and required the Company to pay $1.0 million for this assessment, which was paid in January 2014. Both parties submitted a response to the Court’s inquiry on January 15, 2016. The final hearing for the case was held on May 26, 2016, where each party presented their respective arguments. The judge originally set the decision hearing for June 30, 2016; however, after several postponements on the decision hearing to July 14, 2016 and then to August 18, 2016, the decision date of the case was set to October 27, 2016. On October 27, 2016, the Court decided the case in the Company’s favor. However, the BCO may file an appeal within 14 days from day BCO receives the , which the Court released on November 3, 2016 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 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 | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016. The table below presents the recorded amount of financial assets measured at fair value (in thousands) September 30, 2016 Level 1 Level 2 Level 3 Total Assets Money Market Funds – Fidelity, US $ 1,012 $ — $ — $ 1,012 Interest bearing deposits – various banks 22,534 — — 22,534 Total assets $ 23,546 $ — $ — $ 23,546 Amounts included in: Cash and cash equivalents $ 16,993 $ — $ — $ 16,993 Restricted cash 740 — — 740 Long-term restricted cash 5,813 — — 5,813 Total $ 23,546 $ — $ — $ 23,546 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Money Market Funds – Fidelity, US $ 319 $ — $ — $ 319 Interest bearing deposits – various banks 14,134 — — 14,134 Total assets $ 14,453 $ — $ — $ 14,453 Amounts included in: Cash and cash equivalents $ 8,281 $ — $ — $ 8,281 Restricted cash 737 — — 737 Long-term restricted cash 5,435 — — 5,435 Total $ 14,453 $ — $ — $ 14,453 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
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 and anti-aging products, and weight-management and fitness products through its network marketing distribution channels operating in twenty-five countries. Each of the Company’s business units sells similar packs and products and possesses similar economic characteristics, such as selling prices and gross margins. In each country, the Company markets its products and pays commissions and incentives in similar market environments. The Company’s management reviews its financial information by country and focuses its internal reporting and analysis of revenues by packs and product sales. The Company sells its products through its independent associates who occupy positions in our network and distribute products through similar distribution channels in each country. No single independent associate has ever accounted for more than 10% of the Company’s consolidated net sales. The Company operates facilities in thirteen countries and sells product in twenty-five countries around the world. These facilities are located in the United States, Canada, Switzerland, Australia, the United Kingdom, Japan, the Republic of Korea (South Korea), Taiwan, South Africa, Hong Kong, Singapore, Colombia and Mexico. Each facility services different geographic areas. We currently sell our products in three regions: (i) the Americas (the United States, Canada, Colombia and Mexico); (ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom); and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan and Hong Kong). Consolidated net sales shipped to customers in these regions, along with pack and product information for the three and nine months ended September 30, were as follows (in millions, except percentages) Three months Nine months Region 2016 2015 2016 2015 Americas $ 19.0 39.4 % $ 17.8 40.6 % $ 54.0 39.2 % $ 54.7 40.5 % Asia/Pacific 25.5 52.9 % 22.0 50.1 % 73.2 53.2 % 68.3 50.6 % EMEA 3.6 7.7 % 4.1 9.3 % 10.5 7.6 % 12.0 8.9 % Totals $ 48.1 100.0 % $ 43.9 100.00 % $ 137.7 100.0 % $ 135.0 100.0 % Three months Nine months 2016 2015 2016 2015 Consolidated product sales $ 39.8 $ 35.3 $ 113.6 $ 105.8 Consolidated pack sales 6.9 7.1 20.2 24.9 Consolidated other, including freight 1.4 1.5 3.9 4.3 Consolidated total net sales $ 48.1 $ 43.9 $ 137.7 $ 135.0 Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of September 30, 2016 and December 31, 2015, reside in the following regions, as follows (in millions) Region September 30, 2016 December 31, 2015 Americas $ 3.3 $ 3.5 Asia/Pacific 1.2 1.1 EMEA 0.1 0.1 Total $ 4.6 $ 4.7 Inventory balances, which consist of raw materials, work in process, finished goods, and promotional materials, as offset by the allowance for slow moving or obsolete inventories, reside in the following regions (in millions) Region September 30, 2016 December 31, 2015 Americas $ 4.3 $ 3.4 Asia/Pacific 4.3 4.3 EMEA 1.8 1.5 Total $ 10.4 $ 9.2 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2016 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 10: RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update “ASU” 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) Revenue from Contracts with Customers, identifying Performance Obligations and Licensing Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, 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) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 and December 31, 2015, credit card receivables were $1.9 million and $0.4 million, respectively. As of September 30, 2016 and December 31, 2015, cash and cash equivalents held in bank accounts in foreign countries totaled $33.8 million and $31.3 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 September 30, 2016 and December 31, 2015, our total restricted cash was $ 8.6 |
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 each of September 30, 2016 and December 31, 2015, receivables consisted primarily of amounts due from members and associates. The Company periodically evaluates its receivables for collectability based on historical experience, recent account activities, and the length of time receivables are past due and writes-off receivables when they become uncollectible. At September 30, 2016 and December 31, 2015, the Company held an allowance for doubtful accounts of $ 0.5 |
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. On August 29, 2016, we received information indicating that a portion of the capitalized costs related to an item included in our computer hardware and software asset group would not be completed due to problems with the vendor in completing the code. We evaluated the project and determined a charge was required due to the abandonment of the project. For the quarter and year ending September 30, 2016 we recorded $0.4 million in operating expenses that represented work that was performed, but which no longer has any value to the Company or any possibility of affecting future cash inflows. |
Other Assets | Other Assets As of September 30, 2016 and December 31, 2015, other assets were $ 4.5 2.5 1.7 |
Notes Payable | Notes Payable Notes payable were $ 1.5 0.8 0.7 |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities were $ 1.6 Income Taxes 0.5 0.5 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 September 30, 2016 and December 31, 2015 9.6 September 30, 2016 and December 31, 2015 8.0 3.7 September 30, 2016 and December 31, 2015 Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2015 $ 9,703 Loyalty points forfeited or expired (8,801 ) Loyalty points used (15,077 ) Loyalty points vested 20,403 Loyalty points unvested 1,845 Loyalty deferred revenue as of December 31, 2015 $ 8,073 Loyalty deferred revenue as of January 1, 2016 $ 8,073 Loyalty points forfeited or expired (5,334 ) Loyalty points used ( 11,879 ) Loyalty points vested 15,556 Loyalty points unvested 1,559 Loyalty deferred revenue as of September 30, 2016 $ 7,975 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 nine months ended September 30, 2016 our sales return reserve consisted of the following (in thousands) Sales reserve as of January 1, 2016 $ 147 Provision related to sales made in current period 1,026 Adjustment related to sales made in prior periods 7 Actual returns or credits related to current period ( 872 ) Actual returns or credits related to prior periods ( 145 ) Sales reserve as of September 30, 2016 $ 163 |
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. |
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 and Accumulated Other Comprehensive Income | Comprehensive Income and Accumulated Other Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Denmark, Norway, Sweden, Colombia, 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) | 9 Months Ended |
Sep. 30, 2016 | |
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 | Loyalty program (in thousands) Loyalty deferred revenue as of January 1, 2015 $ 9,703 Loyalty points forfeited or expired (8,801 ) Loyalty points used (15,077 ) Loyalty points vested 20,403 Loyalty points unvested 1,845 Loyalty deferred revenue as of December 31, 2015 $ 8,073 Loyalty deferred revenue as of January 1, 2016 $ 8,073 Loyalty points forfeited or expired (5,334 ) Loyalty points used ( 11,879 ) Loyalty points vested 15,556 Loyalty points unvested 1,559 Loyalty deferred revenue as of September 30, 2016 $ 7,975 |
Sales return reserve | For the nine months ended September 30, 2016 our sales return reserve consisted of the following (in thousands) Sales reserve as of January 1, 2016 $ 147 Provision related to sales made in current period 1,026 Adjustment related to sales made in prior periods 7 Actual returns or credits related to current period ( 872 ) Actual returns or credits related to prior periods ( 145 ) Sales reserve as of September 30, 2016 $ 163 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
INVENTORIES [Abstract] | |
Schedule of inventory | Inventories at September 30, 2016 and December 31, 2015, consisted of the following (in thousands) September 30, 2016 December 31, 2015 Raw materials $ 537 $ 1,187 Finished goods 10,581 9,277 Inventory reserves for obsolescence ( 724 ) (1,265 ) Total $ 10,394 $ 9,199 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
STOCK-BASED COMPENSATION [Abstract] | |
Schedule of compensation cost | The Company recognized compensation expense as follows for the three and nine months ended September 30 (in thousands) Three months ending September 30 Nine months ending September 30 2016 2015 2016 2015 Total gross compensation expense $ 115 $ 149 $ 474 $ 450 Total tax benefit associated with compensation expense 15 38 62 111 Total net compensation expense $ 100 $ 111 $ 412 $ 339 |
Schedule of unrecognized compensation expense | As of September 30, 2016, the Company expects to record compensation expense in the future as follows (in thousands) Three months Year ending December 31, ending December 31, 2016 2017 2018 2019 Total gross unrecognized compensation expense $ 106 $ 297 $ 91 $ 29 Tax benefit associated with unrecognized compensation expense 14 33 7 — Total net unrecognized compensation expense $ 92 $ 264 $ 84 $ 29 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Components of accumulated other comprehensive income | The after-tax components of accumulated other comprehensive income, are as follows (in thousands) Foreign Currency Translation Pension Postretirement Benefit Obligation Accumulated Other Comprehensive Income, Net Balance as of December 31, 2015 $ 358 $ 328 $ 686 Current-period change 1 2,911 — 2,911 Balance as of September 30, 2016 $ 3,269 $ 328 $ 3,597 1 No amounts reclassified from accumulated other comprehensive income. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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) September 30, 2016 Level 1 Level 2 Level 3 Total Assets Money Market Funds – Fidelity, US $ 1,012 $ — $ — $ 1,012 Interest bearing deposits – various banks 22,534 — — 22,534 Total assets $ 23,546 $ — $ — $ 23,546 Amounts included in: Cash and cash equivalents $ 16,993 $ — $ — $ 16,993 Restricted cash 740 — — 740 Long-term restricted cash 5,813 — — 5,813 Total $ 23,546 $ — $ — $ 23,546 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Money Market Funds – Fidelity, US $ 319 $ — $ — $ 319 Interest bearing deposits – various banks 14,134 — — 14,134 Total assets $ 14,453 $ — $ — $ 14,453 Amounts included in: Cash and cash equivalents $ 8,281 $ — $ — $ 8,281 Restricted cash 737 — — 737 Long-term restricted cash 5,435 — — 5,435 Total $ 14,453 $ — $ — $ 14,453 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 three and nine months ended September 30, were as follows (in millions, except percentages) Three months Nine months Region 2016 2015 2016 2015 Americas $ 19.0 39.4 % $ 17.8 40.6 % $ 54.0 39.2 % $ 54.7 40.5 % Asia/Pacific 25.5 52.9 % 22.0 50.1 % 73.2 53.2 % 68.3 50.6 % EMEA 3.6 7.7 % 4.1 9.3 % 10.5 7.6 % 12.0 8.9 % Totals $ 48.1 100.0 % $ 43.9 100.00 % $ 137.7 100.0 % $ 135.0 100.0 % |
Product and pack information | Three months Nine months 2016 2015 2016 2015 Consolidated product sales $ 39.8 $ 35.3 $ 113.6 $ 105.8 Consolidated pack sales 6.9 7.1 20.2 24.9 Consolidated other, including freight 1.4 1.5 3.9 4.3 Consolidated total net sales $ 48.1 $ 43.9 $ 137.7 $ 135.0 |
Long-lived assets, by geographic region | Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of September 30, 2016 and December 31, 2015, reside in the following regions, as follows (in millions) Region September 30, 2016 December 31, 2015 Americas $ 3.3 $ 3.5 Asia/Pacific 1.2 1.1 EMEA 0.1 0.1 Total $ 4.6 $ 4.7 |
Inventory balances, by region | Inventory balances, which consist of raw materials, work in process, finished goods, and promotional materials, as offset by the allowance for slow moving or obsolete inventories, reside in the following regions (in millions) Region September 30, 2016 December 31, 2015 Americas $ 4.3 $ 3.4 Asia/Pacific 4.3 4.3 EMEA 1.8 1.5 Total $ 10.4 $ 9.2 |
ORGANIZATION AND SUMMARY OF S25
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($)RegionPeriod | Dec. 31, 2015USD ($) | ||
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 | $ 1,900 | $ 1,900 | $ 400 | |
Cash and cash equivalents held in foreign bank accounts | 33,800 | 33,800 | 31,300 | |
Restricted Cash [Abstract] | ||||
Restricted cash | 8,600 | 8,600 | 8,100 | |
Accounts Receivable [Abstract] | ||||
Allowance for doubtful accounts | 500 | 500 | 300 | |
Property, Plant and Equipment [Line Items] | ||||
Capitalized cost of operating expenses | 400 | |||
Other Assets [Abstract] | ||||
Other assets | 4,451 | 4,451 | 3,759 | |
Deposits for building leases | 2,500 | 2,500 | 1,900 | |
Fair trade commission deposits | 1,700 | 1,700 | 1,600 | |
Indefinite lived intangible assets | 200 | 200 | 200 | |
Notes Payable [Abstract] | ||||
Notes payable | 1,500 | 1,500 | 1,800 | |
Notes payable, current portion | 805 | 805 | 713 | |
Notes payable, long-term portion | 706 | 706 | 1,069 | |
Other Long-Term Liabilities [Abstract] | ||||
Other long-term liabilities | 1,648 | 1,648 | 1,994 | |
Uncertain income tax position | 200 | 200 | 700 | |
Accrued lease restoration costs | 500 | 500 | 400 | |
Defined benefit plan obligation | 500 | 500 | 500 | |
Revenue Recognition and Deferred Commissions [Abstract] | ||||
Deferred revenue | 9,640 | 9,640 | 8,677 | |
Deferred revenue associated loyalty program | 8,000 | 8,000 | 8,100 | |
Deferred commissions | 3,742 | 3,742 | 3,443 | |
Loyalty Program [Roll Forward] | ||||
Loyalty deferred revenue, beginning balance | 8,073 | 9,703 | ||
Loyalty points forfeited or expired | (5,334) | (8,801) | ||
Loyalty points used | (11,879) | (15,077) | ||
Loyalty points vested | 15,556 | 20,403 | ||
Loyalty points unvested | 1,559 | 1,845 | ||
Loyalty deferred revenue, ending balance | 7,975 | $ 7,975 | 8,073 | |
Percentage of sale returns | 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 | three weeks | |||
Number of weeks following business period end for payment of pack sales commissions | five weeks | |||
Reserve for Sales Returns [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Sales reserve, beginning of year | $ 147 | |||
Provision related to sales made in current period | 1,026 | |||
Adjustment related to sales made in prior periods | 7 | |||
Actual returns or credits related to current period | (872) | |||
Actual returns or credits related to prior periods | (145) | |||
Sales reserve, end of period | $ 163 | $ 163 | $ 147 | |
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 | [1] | 2 years | ||
Leasehold Improvements [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives of assets | [1] | 10 years | ||
[1] | The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term. |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
INVENTORIES [Abstract] | ||
Raw materials | $ 537 | $ 1,187 |
Finished goods | 10,581 | 9,277 |
Inventory reserves for obsolescence | (724) | (1,265) |
Total | $ 10,394 | $ 9,199 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
INCOME TAXES [Abstract] | ||||
Effective tax rate | (77.70%) | 175.50% | (19.80%) | 24.50% |
Income tax benefit | $ (562) | $ (159) | $ (90) | $ 1,397 |
Pre-tax book income due to fluctuation of income between quarters | $ 500 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Average common stock closing price (in dollars per share) | $ 18.02 | $ 18.13 | $ 19.12 | $ 19.83 |
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 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands | May 28, 2014shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2016USD ($)Plan$ / sharesshares | Sep. 30, 2015USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of active stock based compensation plan | Plan | 1 | ||||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted (in shares) | shares | 0 | 12,000 | 10,000 | 32,000 | |
Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 10.36 | $ 12.18 | |||
Stock Options [Member] | 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 | 10.00% | ||||
Option exercise price as percentages of closing exercise price of stock for specific shareholders | 110.00% | ||||
Stock Options [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option contract term | 10 years | ||||
Vesting period of stock options | 3 years | ||||
Expiration period of stock option plan | 5 years | ||||
2008 Plan [Member] | Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | shares | 100,000 | 100,000 | |||
Number of shares adjusted due to reverse stock split (in shares) | shares | 10 | ||||
Increase in number of shares authorized (in shares) | shares | 130,000 | 100,000 | |||
Number of shares available for grant (in shares) | shares | 85,937 | 85,937 | |||
Share-based compensation expense [Abstract] | |||||
Total gross compensation expense | $ 115 | $ 149 | $ 474 | $ 450 | |
Total tax benefit associated with compensation expense | 15 | 38 | 62 | 111 | |
Total net compensation expense | 100 | $ 111 | 412 | $ 339 | |
Unrecognized compensation expense [Abstract] | |||||
Total gross unrecognized compensation expense to be recognized over remainder of current fiscal year | 106 | 106 | |||
Total gross unrecognized compensation expense in 2017 | 297 | 297 | |||
Total gross unrecognized compensation expense in 2018 | 91 | 91 | |||
Total gross unrecognized compensation expense in 2019 | 29 | 29 | |||
Tax benefit associated with unrecognized compensation expense remainder of current fiscal year | 14 | 14 | |||
Tax benefit associated with unrecognized compensation expense in 2017 | 33 | 33 | |||
Tax benefit associated with unrecognized compensation expense in 2018 | 7 | 7 | |||
Tax benefit associated with unrecognized compensation expense in 2019 | 0 | 0 | |||
Total net unrecognized compensation expense | 92 | 92 | |||
Total net unrecognized compensation expense in 2017 | 264 | 264 | |||
Total net unrecognized compensation expense in 2018 | 84 | 84 | |||
Total net unrecognized compensation expense in 2019 | $ 29 | $ 29 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 08, 2016 | Aug. 11, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Nov. 08, 2016 | Aug. 31, 2016 | Aug. 28, 2006 | Jun. 30, 2004 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||
Common stock repurchased (in shares) | 9,009 | 9,009 | |||||||
Common stock repurchased average price (in dollars per share) | $ 17.54 | $ 17.54 | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | $ 38,564 | ||||||||
Current-period change | [1] | 2,911 | |||||||
Ending balance | $ 42,039 | $ 42,039 | |||||||
Dividends [Abstract] | |||||||||
Dividend payable, date declared | Aug. 11, 2016 | ||||||||
Dividend payable per share (in dollars per share) | $ 0.125 | ||||||||
Dividend payable, date to be paid | Sep. 21, 2016 | ||||||||
Dividend payable, date of record | Aug. 31, 2016 | ||||||||
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 | 131,756 | 131,756 | ||||||
Stock repurchase program, authorized amount | $ 1,300 | $ 1,300 | $ 1,300 | ||||||
June 2004 Plan [Member] | Subsequent Event [Member] | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, remaining number of shares authorized to be repurchased (in shares) | 19,084 | 19,084 | |||||||
Common stock repurchased (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 | $ 20,000 | $ 20,000 | ||||||
Value authorized to be repurchased under reactivated repurchase plan | 500 | 500 | $ 500 | ||||||
August 2006 Plan [Member] | Subsequent Event [Member] | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, remaining authorized value to be repurchased | $ 19,800 | $ 19,800 | |||||||
Stock repurchase program, value of shares repurchased | $ 200 | ||||||||
Accumulated Other Comprehensive Income, Net [Member] | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | 686 | ||||||||
Ending balance | 3,597 | 3,597 | |||||||
Foreign Currency Translation [Member] | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | 358 | ||||||||
Current-period change | [1] | 2,911 | |||||||
Ending balance | 3,269 | 3,269 | |||||||
Pension Postretirement Benefit Obligation [Member] | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | 328 | ||||||||
Current-period change | [1] | 0 | |||||||
Ending balance | $ 328 | $ 328 | |||||||
[1] | No amounts reclassified from accumulated other comprehensive income. |
LITIGATION (Details)
LITIGATION (Details) - USD ($) | Jun. 01, 2016 | 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] | Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Estimated damages | $ 500,000 | |||
Samuel L. Caster and Wonder Enterprises, LLC [Member] | Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Estimated damages | $ 3,500,000 | |||
Vivian Hsiaoling Chang and Alan Jyh Woei Hsu [Member] | Pending Litigation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Damages sought | $ 22,300 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Amounts included in [Abstract] | ||
Restricted cash | $ 8,600 | $ 8,100 |
Recurring Basis [Member] | ||
Assets [Abstract] | ||
Money Market Funds - Fidelity, US | 1,012 | 319 |
Interest bearing deposits - various banks | 22,534 | 14,134 |
Amounts included in [Abstract] | ||
Cash and cash equivalents | 16,993 | 8,281 |
Restricted cash | 740 | 737 |
Long-term restricted cash | 5,813 | 5,435 |
Total | 23,546 | 14,453 |
Recurring Basis [Member] | Level 1 [Member] | ||
Assets [Abstract] | ||
Money Market Funds - Fidelity, US | 1,012 | 319 |
Interest bearing deposits - various banks | 22,534 | 14,134 |
Amounts included in [Abstract] | ||
Cash and cash equivalents | 16,993 | 8,281 |
Restricted cash | 740 | 737 |
Long-term restricted cash | 5,813 | 5,435 |
Total | 23,546 | 14,453 |
Recurring Basis [Member] | Level 2 [Member] | ||
Assets [Abstract] | ||
Money Market Funds - Fidelity, US | 0 | 0 |
Interest bearing deposits - various banks | 0 | 0 |
Amounts included in [Abstract] | ||
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] | ||
Assets [Abstract] | ||
Money Market Funds - Fidelity, US | 0 | 0 |
Interest bearing deposits - various banks | 0 | 0 |
Amounts included in [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total | $ 0 | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)Country | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)RegionSegmentCountry | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
SEGMENT INFORMATION [Abstract] | |||||
Number of operating segments | Segment | 1 | ||||
Number of countries in which entity network marketing and distribution channels operates | Country | 25 | ||||
Minimum percentage of revenue considered for accounted of major customer | 10.00% | ||||
Number of countries in which company operates facilities | Country | 13 | 13 | |||
Number of countries in which company sells products | Country | 25 | ||||
Number of regions in which company sells products | Region | 3 | ||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | $ 48,146 | $ 43,860 | $ 137,664 | $ 134,956 | |
Percent of total revenue | 100.00% | 100.00% | 100.00% | 100.00% | |
Long-lived assets by regions [Abstract] | |||||
Long-lived assets | $ 4,600 | $ 4,600 | $ 4,700 | ||
Inventory, by country [Abstract] | |||||
Inventories, net | 10,394 | 10,394 | 9,199 | ||
Consolidated Product Sales [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | 39,800 | $ 35,300 | 113,600 | $ 105,800 | |
Consolidated Pack Sales [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | 6,900 | 7,100 | 20,200 | 24,900 | |
Consolidated Other, Including Freight [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | 1,400 | 1,500 | 3,900 | 4,300 | |
Reportable Geographical Components [Member] | Americas [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | $ 19,000 | $ 17,800 | $ 54,000 | $ 54,700 | |
Percent of total revenue | 39.40% | 40.60% | 39.20% | 40.50% | |
Long-lived assets by regions [Abstract] | |||||
Long-lived assets | $ 3,300 | $ 3,300 | 3,500 | ||
Inventory, by country [Abstract] | |||||
Inventories, net | 4,300 | 4,300 | 3,400 | ||
Reportable Geographical Components [Member] | Asia/Pacific [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | $ 25,500 | $ 22,000 | $ 73,200 | $ 68,300 | |
Percent of total revenue | 52.90% | 50.10% | 53.20% | 50.60% | |
Long-lived assets by regions [Abstract] | |||||
Long-lived assets | $ 1,200 | $ 1,200 | 1,100 | ||
Inventory, by country [Abstract] | |||||
Inventories, net | 4,300 | 4,300 | 4,300 | ||
Reportable Geographical Components [Member] | EMEA [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Consolidated total net sales | $ 3,600 | $ 4,100 | $ 10,500 | $ 12,000 | |
Percent of total revenue | 7.70% | 9.30% | 7.60% | 8.90% | |
Long-lived assets by regions [Abstract] | |||||
Long-lived assets | $ 100 | $ 100 | 100 | ||
Inventory, by country [Abstract] | |||||
Inventories, net | $ 1,800 | $ 1,800 | $ 1,500 |