Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 29, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | NATURES SUNSHINE PRODUCTS INC | |
Entity Central Index Key | 275,053 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,747,314 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 41,428 | $ 41,420 |
Accounts receivable, net of allowance for doubtful accounts of $232 and $190, respectively | 7,968 | 7,700 |
Investments available for sale | 1,797 | 1,772 |
Inventories | 45,002 | 38,495 |
Deferred income tax assets | 4,795 | 5,021 |
Prepaid expenses and other | 8,039 | 7,110 |
Total current assets | 109,029 | 101,518 |
Property, plant and equipment, net | 70,423 | 68,728 |
Investment securities - trading | 1,275 | 1,044 |
Intangible assets, net | 513 | 559 |
Deferred income tax assets | 17,385 | 17,339 |
Other assets | 12,410 | 11,332 |
Total assets | 211,035 | 200,520 |
Current liabilities: | ||
Accounts payable | 8,971 | 6,341 |
Accrued volume incentives | 17,860 | 14,913 |
Accrued liabilities | 23,995 | 23,726 |
Deferred revenue | 4,895 | 4,160 |
Revolving credit facility payable | 3,920 | 2,696 |
Income taxes payable | 1,322 | 1,300 |
Total current liabilities | 60,963 | 53,136 |
Liability related to unrecognized tax benefits | 7,811 | 7,809 |
Deferred compensation payable | 1,275 | 1,044 |
Other liabilities | 2,368 | 2,266 |
Total liabilities | 72,417 | 64,255 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, no par value, 50,000 shares authorized, 18,747 and 18,588 shares issued and outstanding, respectively | 128,146 | 126,670 |
Retained earnings | 18,969 | 18,088 |
Noncontrolling interests | 2,268 | 2,750 |
Accumulated other comprehensive loss | (10,765) | (11,243) |
Total shareholders’ equity | 138,618 | 136,265 |
Total liabilities and shareholders' equity | $ 211,035 | $ 200,520 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 232 | $ 190 |
Common stock, par value (in dollars per share) | ||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 18,747,000 | 18,588,000 |
Common stock, shares outstanding (in shares) | 18,747,000 | 18,588,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Net sales revenue | $ 89,366 | $ 81,247 | $ 171,768 | $ 165,125 |
Cost of sales | (23,078) | (21,068) | (45,098) | (42,949) |
Gross profit | 66,288 | 60,179 | 126,670 | 122,176 |
Operating expenses: | ||||
Volume incentives | 30,791 | 29,603 | 60,668 | 59,940 |
Selling, general and administrative | 31,249 | 27,392 | 59,634 | 53,722 |
Operating income | 4,248 | 3,184 | 6,368 | 8,514 |
Other income (loss), net | (622) | (2) | 937 | (320) |
Income before provision for income taxes | 3,626 | 3,182 | 7,305 | 8,194 |
Provision for income taxes | 1,260 | 787 | 3,150 | 1,596 |
Net income from continuing operations | 2,366 | 2,395 | 4,155 | 6,598 |
Income from discontinued operations | 0 | 0 | 0 | 1,312 |
Net income | 2,366 | 2,395 | 4,155 | 7,910 |
Net loss attributable to noncontrolling interests | (202) | (166) | (482) | (318) |
Net income attributable to common shareholders | $ 2,568 | $ 2,561 | $ 4,637 | $ 8,228 |
Basic earnings per share attributable to common shareholders: | ||||
Net income from continuing operations (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.25 | $ 0.35 |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.07 |
Net income attributable to common shareholders (in dollars per share) | 0.14 | 0.14 | 0.25 | 0.44 |
Diluted earnings per share attributable to common shareholders: | ||||
Net income from continuing operations (in dollars per share) | 0.14 | 0.12 | 0.24 | 0.34 |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.07 |
Net income attributable to common shareholders (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.24 | $ 0.43 |
Weighted average basic common shares outstanding (in shares) | 18,723 | 18,720 | 18,708 | 18,671 |
Weighted average diluted common shares outstanding (in shares) | 18,940 | 19,244 | 18,946 | 19,157 |
Dividends declared per common share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.2 | $ 0.2 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,366 | $ 2,395 | $ 4,155 | $ 7,910 |
Foreign currency translation gain (loss) (net of tax) | 537 | (125) | 462 | (146) |
Reclassification of net realized gains on marketable securities in net income (net of tax) | 0 | (294) | 0 | (294) |
Net unrealized gains on investment securities (net of tax) | 4 | 7 | 16 | 29 |
Total comprehensive income | $ 2,907 | $ 1,983 | $ 4,633 | $ 7,499 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Noncontrolling Interest | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2015 | $ 136,265 | $ 126,670 | $ 18,088 | $ 2,750 | $ (11,243) |
Balance (in shares) at Dec. 31, 2015 | 18,588 | 18,588 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Share-based compensation expense | $ 1,586 | $ 1,586 | |||
Shares issued from the exercise of stock options and vesting of restricted stock units, net of shares exchanged for withholding tax | (110) | $ (110) | |||
Shares issued from the exercise of stock options and vesting of restricted stock units, net of shares exchanged for withholding tax (in shares) | 159 | ||||
Cash dividends ($0.20 per share) | (3,756) | (3,756) | |||
Net income | 4,155 | 4,637 | (482) | ||
Other comprehensive income | 478 | 478 | |||
Balance at Jun. 30, 2016 | $ 138,618 | $ 128,146 | $ 18,969 | $ 2,268 | $ (10,765) |
Balance (in shares) at Jun. 30, 2016 | 18,747 | 18,747 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) | 6 Months Ended |
Jun. 30, 2016$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends (in dollars per share) | $ 0.20 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 4,155 | $ 7,910 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for doubtful accounts | 62 | 33 |
Depreciation and amortization | 2,396 | 2,152 |
Share-based compensation expense | 1,586 | 2,085 |
Loss (gain) on sale of property and equipment | 78 | (1,251) |
Deferred income taxes | 311 | (46) |
Purchase of trading investment securities | (252) | (156) |
Proceeds from sale of trading investment securities | 56 | 82 |
Realized and unrealized gains on investments | (60) | (493) |
Foreign exchange (gains) losses | (546) | 764 |
Changes in assets and liabilities: | ||
Accounts receivable | (164) | (271) |
Inventories | (6,177) | (659) |
Prepaid expenses and other current assets | (912) | (4,057) |
Other assets | (1,027) | 16 |
Accounts payable | 2,402 | 1,124 |
Accrued volume incentives | 2,798 | (146) |
Accrued liabilities | 950 | (2,102) |
Deferred revenue | 735 | (727) |
Income taxes payable | (150) | (1,452) |
Liability related to unrecognized tax benefits | 231 | 230 |
Deferred compensation payable | (9) | 93 |
Net cash provided by operating activities | 6,463 | 3,129 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (4,592) | (13,071) |
Proceeds from sale of property, plant and equipment | 0 | 1,373 |
Proceeds from sale/maturities of investments available for sale | 0 | 810 |
Net cash used in investing activities | (4,592) | (10,888) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments of cash dividends | (3,756) | (3,740) |
Net borrowings on revolving credit facility | 1,224 | 0 |
Net proceeds from the exercise of stock options | 59 | 3,476 |
Payment of withholding taxes related to the vesting of restricted stock units | (169) | 0 |
Repurchase of common stock | 0 | (3,783) |
Net cash used in financing activities | (2,642) | (4,047) |
Effect of exchange rates on cash and cash equivalents | 779 | (676) |
Net increase (decrease) in cash and cash equivalents | 8 | (12,482) |
Cash and cash equivalents at the beginning of the period | 41,420 | 58,699 |
Cash and cash equivalents at the end of the period | 41,428 | 46,217 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 3,036 | 6,185 |
Cash paid for interest | $ 122 | $ 59 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Nature’s Sunshine Products, Inc., together with its subsidiaries (hereinafter referred to collectively as the “Company”), is a natural health and wellness company primarily engaged in the manufacturing and direct selling of nutritional and personal care products. The Company is a Utah corporation with its principal place of business in Lehi, Utah, and sells its products to a sales force of independent distributors who use the products themselves or resell them to other independent distributors or consumers. The formulation, manufacturing, packaging, labeling, advertising, distribution and sale of each of the Company’s major product groups are subject to regulation by one or more governmental agencies. The Company markets its products in Australia, Austria, Belarus, Canada, Colombia, Costa Rica, the Czech Republic, Denmark, the Dominican Republic, Ecuador, El Salvador, Finland, Germany, Guatemala, Honduras, Hong Kong, Iceland, Indonesia, Ireland, Italy, Japan, Kazakhstan, Latvia, Lithuania, Malaysia, Mexico, Moldova, Mongolia, the Netherlands, New Zealand, Nicaragua, Norway, Panama, the Philippines, Poland, Russia, Singapore, Slovenia, South Korea, Spain, Sweden, Taiwan, Thailand, Ukraine, the United Kingdom, and the United States. The Company also markets its products through a wholesale model to Australia, Chile, Israel, New Zealand, Norway, Peru, Portugal, Spain and the United Kingdom. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation of the Company’s financial information as of June 30, 2016 , and for the three and six -month periods ended June 30, 2016 and 2015 . The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the fiscal year ending December 31, 2016 . It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Restructuring Related Activities During the year ended December 31, 2015 , the Company announced a restructuring plan that has been substantially completed. Of the $3.3 million of non-recurring restructuring costs incurred during the year ended December 2015 , $9,788 of severance costs and $0.1 million of other exit costs remained payable as of June 30, 2016 and $0.6 million of severance costs and $0.2 million of other exit costs remained payable as of December 31, 2015 . There were $0 and $2.1 million of restructuring costs incurred during the six months ended June 30, 2016 and 2015 , respectively. Noncontrolling Interests Noncontrolling interest decreased as a result of the net loss attributable to the noncontrolling interests by $0.5 million and $0.3 million during the six months ended June 30, 2016 and 2015 , respectively. As of June 30, 2016 and 2015 , noncontrolling interests were $2.3 million and $3.5 million , respectively. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 Revenue from Contracts with Customers (Topic 606). This update requires an entity to recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. As such, this update affects an entity that either enters into contracts with customers or transfers goods and services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. This update will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. In April 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers - Identifying Performance Obligations and Licensing , which further clarifies the implementation guidance relating to identifying performance obligations and the licensing implementation guidance. These standards, pursuant to ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date issued by the FASB in August 2015, will be effective for the Company in the first quarter of 2018. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements: "Going Concern" (Subtopic 205-40). The purpose of this ASU is to incorporate into U.S. Generally Accepted Accounting Principles ("U.S. GAAP") management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued, and to provide related footnote disclosures. This update is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This update specifies that inventory should be subsequently measured at the lower of cost or net realizable value, which is the ordinary selling price less any completion, transportation and disposal costs. However, the ASU does not apply to inventory measured using the last-in-first-out or retail methods. This update is effective for interim and annual periods beginning after December 15, 2016. Adoption of the ASU is prospective. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This guidance requires that entities with a classified statement of financial position present all deferred tax assets and liabilities as noncurrent. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2016, which will require the Company to adopt the new guidance in the first quarter of fiscal 2017. Early adoption is permitted for financial statements that have not been previously issued and may be applied on either a prospective or retrospective basis. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This update amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. This update is effective for interim and annual periods beginning after December 15, 2017. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases . This update specifies that lessees should recognize assets and liabilities arising from all leases, except for leases with a lease term of 12 months or less. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and continue to depend on its classification as a finance or operating lease. For public companies, the ASU will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations; however, it is expected to gross-up the consolidated balance sheet. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company is currently in the process of evaluating the impact of the adoption on its financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations In November 2014, the Company ceased its operations in Venezuela due to the difficulties and uncertainties related to import controls, difficulties associated with repatriating cash and high inflation. This market was part of the Company’s NSP Americas segment and all of the income from discontinued operations is attributable to the common shareholders of the Company. The following table summarizes the operating results of the Company’s discontinued operations (dollar amounts in thousands): June 30, June 30, Net sales revenue $ — $ — Income before income tax provision $ — $ 1,312 Income tax provision — — Income from discontinued operations $ — $ 1,312 During the six months ended June 30, 2015 , the Company received $1.3 million in net proceeds from the sales of its fixed assets in Venezuela, which is included in the results from discontinued operations. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The composition of inventories is as follows (dollar amounts in thousands): June 30, December 31, Raw materials $ 14,728 $ 13,351 Work in progress 1,038 789 Finished goods 29,236 24,355 Total inventory $ 45,002 $ 38,495 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The amortized cost and estimated fair values of available-for-sale securities by balance sheet classification are as follows (dollar amounts in thousands): As of June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities funds $ 1,793 $ 4 $ — $ 1,797 Total short-term investment securities $ 1,793 $ 4 $ — $ 1,797 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities funds $ 1,794 $ — $ (22 ) $ 1,772 Total short-term investment securities $ 1,794 $ — $ (22 ) $ 1,772 There were no proceeds from the sales of available-for-sale securities during the six -month periods ended June 30, 2016 and 2015 . The Company’s trading securities portfolio totaled $1.3 million at June 30, 2016 , and $1.0 million at December 31, 2015 , and generated gains of $35,000 and $21,000 for the six months ended June 30, 2016 and 2015 , respectively. As of June 30, 2016 and December 31, 2015 , the Company had an unrealized gain of $4,000 and an unrealized loss of $22,000 , respectively, in its U.S. government securities funds. There were no securities that were in a loss position for more than 12 months. |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility The Company’s revolving credit agreement with Wells Fargo Bank, N.A., permits the Company to borrow up to $25.0 million through September 1, 2017, bearing interest at LIBOR plus 1.25 percent ( 1.75 percent as of June 30, 2016 and December 31, 2015 ). The Company must pay an annual commitment fee of 0.25 percent on the unused portion of the commitment. The revolving credit agreement matures on September 1, 2017. The Company settles its net borrowings under the revolving credit agreement daily, and as a result, has classified its outstanding borrowings as current on its condensed consolidated balance sheet as of June 30, 2016 . At June 30, 2016 and December 31, 2015 , the outstanding balance under the revolving credit agreement was $3.9 million and $2.7 million , respectively. The revolving credit agreement contains restrictions on leverage, minimum net income and consecutive quarterly net losses. In addition, the agreement restricts capital expenditures, lease expenditures, other indebtedness, liens on assets, guaranties, loans and advances and the merger, consolidation and the transfer of assets except in the ordinary course of business. The Company remains in compliance with these debt covenants as of June 30, 2016 . |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per common share (“Basic EPS”), is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. Following is a reconciliation of the numerator and denominator of Basic EPS to the numerator and denominator of Diluted EPS for the three and six months ended June 30, 2016 and 2015 (dollar and share amounts in thousands, except for per share information): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net income attributable to common shareholders: Net income from continued operations $ 2,568 $ 2,561 $ 4,637 $ 6,916 Income from discontinued operations $ — $ — $ — $ 1,312 Net income $ 2,568 $ 2,561 $ 4,637 $ 8,228 Basic weighted average shares outstanding 18,723 18,720 18,708 18,671 Basic earnings per share attributable to common shareholders: Net income from continued operations $ 0.14 $ 0.13 $ 0.25 $ 0.35 Income from discontinued operations $ — $ — $ — $ 0.07 Net income $ 0.14 $ 0.14 $ 0.25 $ 0.44 Diluted shares outstanding Basic weighted-average shares outstanding 18,723 18,720 18,708 18,671 Stock-based awards 217 524 238 486 Diluted weighted-average shares outstanding 18,940 19,244 18,946 19,157 Diluted earnings per share attributable to common shareholders: Net income from continued operations $ 0.14 $ 0.12 $ 0.24 $ 0.34 Income from discontinued operations $ — $ — $ — $ 0.07 Net income $ 0.14 $ 0.13 $ 0.24 $ 0.43 Potentially dilutive shares excluded from diluted-per-share amounts: Stock options 86 348 86 348 Potentially anti-dilutive shares excluded from diluted-per-share amounts: Stock options 1,445 691 1,445 641 Potentially dilutive shares excluded from diluted-per-share amounts include performance-based options to purchase shares of common stock for which certain earnings metrics have not been achieved. Potentially anti-dilutive shares excluded from diluted-per-share amounts include both non-qualified stock options and unearned performance-based options to purchase shares of common stock with exercise prices greater than the weighted-average share price during the period and shares that would be anti-dilutive to the computation of diluted net income per share for each of the years presented. |
Capital Transactions
Capital Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Capital Transactions | |
Capital Transactions | Capital Transactions Dividends The declaration of future dividends is subject to the discretion of the Company’s Board of Directors and will depend upon various factors, including the Company’s earnings, financial condition, restrictions imposed by any indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by its Board of Directors. On February 25, 2016, the Company announced a cash dividend of $0.10 per common share in an aggregate amount of $1.9 million , which was paid on March 22, 2016 to shareholders of record as of March 11, 2016. On May 10, 2016, the Company announced a cash dividend of $0.10 per common share in an aggregate amount of $1.9 million , which was paid on June 6, 2016 to shareholders of record as of May 25, 2016. Share Repurchase Program In November 2014, the Board of Directors authorized a $20.0 million share repurchase program beginning January 1, 2015. Such purchases may be made in the open market, through block trades, in privately negotiated transactions or otherwise. The timing and amount of any shares repurchased will be determined based on the Company’s evaluation of market conditions and other factors and the program may be discontinued or suspended at any time. At June 30, 2016 , the remaining balance available for repurchases under the program was $13.4 million . There were no repurchases of common shares by the Company during the six months ended June 30, 2016 . Share-Based Compensation During the year ended December 31, 2012, the Company’s shareholders adopted and approved the Nature’s Sunshine Products, Inc. 2012 Stock Incentive Plan (the “2012 Incentive Plan”). The 2012 Incentive Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance awards, stock awards and other stock-based awards. The Compensation Committee of the Board of Directors has authority and discretion to determine the type of award, as well as the amount, terms and conditions of each award under the 2012 Incentive Plan, subject to the limitations of the 2012 Incentive Plan. A total of 1,500,000 shares of the Company’s common stock were originally authorized for the granting of awards under the 2012 Incentive Plan. In 2015, the Company’s shareholders approved an amendment to the 2012 Incentive Plan, to increase the number of shares of Common Stock reserved for issuance by 1,500,000 shares. The number of shares available for awards, as well as the terms of outstanding awards, are subject to adjustment as provided in the 2012 Incentive Plan for stock splits, stock dividends, recapitalizations and other similar events. The Company also maintains a stock incentive plan, which was approved by shareholders in 2009 (the “2009 Incentive Plan”). The 2009 Incentive Plan also provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance awards, stock awards and other stock-based awards. Under the 2012 Incentive Plan, any shares subject to award, or awards forfeited or reacquired by the Company issued under the 2009 Incentive Plan are available for award up to a maximum of 400,000 shares. Stock Options The Company’s outstanding stock options include time-based stock options, which vest over differing periods ranging from the date of issuance up to 48 months from the option grant date; performance-based stock options, which have already vested upon achieving operating income margins of six , eight and ten percent as reported in four of five consecutive quarters over the term of the options; performance-based stock options, which vest upon achieving cumulative annual net sales revenue growth targets over a rolling two -year period, subject to the Company maintaining at least an eight percent operating income margin during the applicable period; and performance-based stock options, which vest upon achieving annual net sales targets over a rolling one -year period. Stock option activity for the six -month period ended June 30, 2016 , is as follows (amounts in thousands, except per share information): Number of Shares Weighted Average Exercise Price Per Share Options outstanding at December 31, 2015 1,683 $ 12.21 Granted — — Forfeited or canceled (59 ) 11.77 Exercised (25 ) 2.35 Options outstanding at June 30, 2016 1,599 12.39 Share-based compensation expense from time-based stock options for the three-month periods ended June 30, 2016 and 2015, was approximately $0.2 million and $0.2 million , respectively. Share-based compensation expense from time-based stock options for the six -month periods ended June 30, 2016 and 2015 , was approximately $0.4 million and $0.7 million , respectively. As of June 30, 2016 and December 31, 2015 , the unrecognized share-based compensation expense related to the grants described above was $0.6 million and $1.1 million , respectively. As of June 30, 2016 , the remaining compensation cost is expected to be recognized over the weighted-average period of approximately 1.3 years . The Company has not recognized any share-based compensation expense related to the net sales revenue performance-based stock options for the six -month periods ended June 30, 2016 and 2015 . Should the Company attain all of the net sales revenue metrics related to the net sales revenue performance-based stock option grants, the Company would recognize up to $0.4 million of potential share-based compensation expense. At June 30, 2016 , the aggregate intrinsic value of outstanding stock options to purchase 1,599,000 shares of common stock, exercisable stock options to purchase 1,141,000 shares of common stock and stock options to purchase 377,000 shares of common stock that are expected to vest was $0.6 million , $0.6 million and $0.0 million , respectively. At December 31, 2015 , the aggregate intrinsic value of outstanding options to purchase 1,683,000 shares of common stock, the exercisable options to purchase 958,000 shares of common stock, and options to purchase 588,000 shares of common stock expected to vest was $0.9 million , $0.9 million and $0.0 million , respectively. For the six -month periods ended June 30, 2016 and 2015 , the Company issued 25,000 and 373,000 shares of common stock upon the exercise of stock options at an average exercise price of $2.35 , and $9.58 per share, respectively. The aggregate intrinsic values of options exercised during the six -month periods ended June 30, 2016 and 2015 was $0.2 million , and $1.4 million , respectively. For the three-month period ended June 30, 2015, the Company recognized $0.1 million of tax benefits from the exercise of stock options during the period. For the six -month periods ended June 30, 2016 and 2015 , the Company recognized $0.1 million and $0.5 million of tax benefits from the exercise of stock options during the period, respectively. Restricted Stock Units The Company’s outstanding restricted stock units ("RSUs") include time-based RSUs, which vest over differing periods ranging from 12 months up to 48 months from the RSU grant date. RSUs granted to the Board of Directors contain a restriction period in which the shares are not issued until two years after vesting. At June 30, 2016 and December 31, 2015 , there were 44,000 and 60,000 vested RSUs granted to the Board of Directors that had a restriction period. RSU activity for the six -month period ended June 30, 2016 , is as follows (amounts in thousands, except per share information): Number of Shares Weighted Average Grant Date Fair Value Restricted Stock Units outstanding at December 31, 2015 744 $ 12.48 Granted 206 8.61 Forfeited (10 ) 11.73 Issued (154 ) 13.05 Restricted Stock Units outstanding at June 30, 2016 786 11.38 During the six -month period ended June 30, 2016 , the Company granted 206,000 RSUs under the 2012 Incentive Plan to the Company’s Board of Directors, executive officers and other employees, which are composed of both time-based RSUs and net sales and operating income and earnings-per-share performance-based RSUs. The time-based RSUs were issued with a weighted-average grant date fair value of $8.61 per share and vest in annual installments over a three -year period from the grant date or according to the restrictions for the Board of Directors noted above. The net sales and operating income and earnings-per-share performance-based RSUs were issued with a weighted-average grant date fair value of $13.05 per share and vest upon achieving both (i) net sales and operating income targets over a three -year period from the grant date and (ii) earnings-per-share targets over a six -year period from the grant date. RSUs are valued at market value on the date of grant, which is the grant date share price discounted for expected dividend payments during the vesting period. Share-based compensation expense for RSUs for the three-month periods ended June 30, 2016 and 2015, was approximately $0.5 million and $0.6 million , respectively. Share-based compensation expense from RSUs for the six -month periods ended June 30, 2016 and 2015 , was approximately $1.1 million and $1.3 million , respectively. As of June 30, 2016 and December 31, 2015 , the unrecognized share-based compensation expense related to the grants described above was $2.5 million and $2.5 million , respectively. As of June 30, 2016 , the remaining compensation expense is expected to be recognized over the weighted average period of approximately 1.6 years . The Company has not recognized any share-based compensation expense related to the net sales revenue and earnings-per-share performance-based RSUs for the six -month periods ended June 30, 2016 and 2015 . Should the Company attain all of the net sales revenue metrics related to the net sales revenue performance-based stock option grants, the Company would recognize up to $3.3 million of potential share-based compensation expense. The number of shares issued upon vesting of RSUs granted pursuant to the Company's share-based compensation plans is net of the minimum statutory withholding requirements that the Company pays on behalf of its employees, which was 20,000 shares for the six -month period ended June 30, 2016 . Although shares withheld are not issued, they are treated as common share repurchases for accounting purposes, as they reduce the number of shares that would have been issued upon vesting. These shares do not count against the authorized capacity under the repurchase program described above. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has four business segments. These business segments are components of the Company for which separate information is available that is evaluated regularly by the chief executive officer in deciding how to allocate resources and in assessing relative performance. The Company's four business segments are divided based on the different characteristics of their distributor bases, selling and distributor compensation plans and product formulations, as well as the internal organization of its officers and their responsibilities and business operations. Three business segments operate under the Nature’s Sunshine Products brand (NSP Americas; NSP Russia, Central and Eastern Europe; and China and New Markets). The Company’s China and New Markets segment anticipates deploying a multi-channel go-to-market strategy that offers select Nature’s Sunshine branded products through a direct selling model across China as well as through e-commerce channels. The time to market will be dependent upon regulatory processes including product registration and permit approvals. The China and New Markets segment also includes the Company’s wholesale business, in which the Company sells its products to various locally managed entities independent of the Company that have distribution rights for the relevant market. All of the net sales revenue to date in the China and New Markets segment is through the Company’s wholesale business to foreign markets, and beginning in the second quarter of 2016, pre-opening product sales through Hong Kong. The fourth business segment operates under the Synergy® WorldWide brand. Reportable business segment information is as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net sales revenue: NSP Americas $ 44,725 $ 45,050 $ 89,908 $ 91,560 NSP Russia, Central and Eastern Europe 6,269 6,815 12,621 14,258 Synergy WorldWide 33,013 28,480 62,861 57,248 China and New Markets 5,359 902 6,378 2,059 Total net sales revenue 89,366 81,247 171,768 165,125 Contribution margin (1): NSP Americas 19,103 19,027 38,020 38,547 NSP Russia, Central and Eastern Europe 2,065 2,314 4,246 4,910 Synergy WorldWide 10,245 8,820 19,184 17,868 China and New Markets 4,084 415 4,552 911 Total contribution margin 35,497 30,576 66,002 62,236 Selling, general and administrative (2) 31,249 27,392 59,634 53,722 Operating income 4,248 3,184 6,368 8,514 Other income (expense), net (622 ) (2 ) 937 (320 ) Income from continuing operations before provision for income taxes $ 3,626 $ 3,182 $ 7,305 $ 8,194 _________________________________________ (1) Contribution margin consists of net sales revenue less cost of sales and volume incentives expense. For the China and New Markets segment, contribution margin does not includes services fees related to pre-opening product sales through Hong Kong. (2) Service fees in the China and New Markets segment related to pre-opening product sales through Hong Kong totaled $2.0 million for the three and six month periods ended June 30, 2016, and $0.0 million for the three and six month periods ended June 30, 2015. These service fees are included in selling, general and administrative expense. From an individual country perspective, only the United States and South Korea comprise 10 percent or more of consolidated net sales revenue for the three and six -month periods ended June 30, 2016 and 2015 , as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net sales revenue: United States $ 37,598 $ 37,054 $ 75,893 $ 75,576 South Korea 15,473 12,070 28,671 24,150 Other 36,295 32,123 67,204 65,399 $ 89,366 $ 81,247 $ 171,768 $ 165,125 Revenue generated by each of the Company’s product lines is set forth below (dollar amounts in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 NSP Americas: General health $ 20,234 $ 19,456 $ 39,851 $ 39,488 Immune 3,738 5,038 9,314 11,255 Cardiovascular 3,418 3,543 6,530 6,644 Digestive 11,845 13,263 24,924 26,628 Personal care 2,853 870 3,783 1,840 Weight management 2,637 2,880 5,506 5,705 44,725 45,050 89,908 91,560 NSP Russia, Eastern and Central Europe: General health $ 2,501 $ 2,799 $ 5,224 $ 5,678 Immune 857 763 1,397 1,676 Cardiovascular 493 446 970 899 Digestive 1,407 1,852 3,528 3,822 Personal care 853 627 1,102 1,509 Weight management 158 328 400 674 6,269 6,815 12,621 14,258 Synergy WorldWide: General health $ 9,694 $ 7,645 $ 18,334 $ 15,347 Immune 41 84 250 277 Cardiovascular 13,505 12,411 26,198 25,067 Digestive 3,442 2,374 5,929 4,668 Personal care 1,948 1,732 3,887 3,562 Weight management 4,383 4,234 8,263 8,327 33,013 28,480 62,861 57,248 China and New Markets: General health $ 1,537 $ 426 $ 2,008 $ 957 Immune 216 103 347 261 Cardiovascular 1,450 73 1,523 154 Digestive 1,262 225 1,522 515 Personal care 439 19 461 46 Weight management 455 56 517 126 5,359 902 6,378 2,059 $ 89,366 $ 81,247 $ 171,768 $ 165,125 Beginning in 2016, for the Synergy WorldWide segment, the Company changed its allocation of products sold within promotional product kits from the category associated with the predominant product, to each individual product being included in its respective category. Prior periods have been reclassified to conform to the current period’s presentation. From an individual country perspective, only the United States comprised 10 percent or more of consolidated property, plant and equipment as follows (dollar amounts in thousands): June 30, December 31, Property, plant and equipment: United States $ 68,089 $ 66,044 Other 2,334 2,684 Total property, plant and equipment $ 70,423 $ 68,728 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2016 and 2015 , the Company’s provision for income taxes, as a percentage of income before income taxes was 34.7 percent and 24.7 percent , respectively, compared with a U.S. federal statutory rate of 35.0 percent . For the six months ended June 30, 2016 and 2015 , the Company’s provision for income taxes, as a percentage of income before income taxes was 43.1 percent and 19.5 percent , respectively, compared with a U.S. federal statutory rate of 35.0 percent . The difference between the effective tax rate and the U.S. federal statutory tax rate for the three months ended June 30, 2016 , was attributed to foreign tax credits arising from intercompany dividends paid by foreign subsidiaries to the U.S. corporation, offset by current year foreign losses, primarily related to China, that presently do not provide future tax benefit, and unfavorable adjustments related to foreign operations. The difference between the effective tax rate and the U.S. federal statutory tax rate for the six months ended June 30, 2016 , was attributed to current year foreign losses, primarily related to China, that presently do not provide future tax benefit, and an adjustment of a prior year deferred tax assets related to foreign currency translation amounts, offset partially by foreign tax credits arising from intercompany dividends paid by foreign subsidiaries to the U.S. corporation. The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and six months ended June 30, 2015 , was primarily attributed to adjustments to the valuation allowances on U.S. foreign tax credits and on U.S. capital loss carryforwards, offset by the impact of current year losses that will not provide tax benefit. Changes to the effective rate due to dividends received from foreign subsidiaries and the impact of foreign tax credits are expected to be recurring. Depending on various factors, changes from the foregoing items may be favorable or unfavorable in a particular period. The Company’s U.S. federal income tax returns for 2012 through 2014 are open to examination for federal tax purposes. The Company has several foreign tax jurisdictions that have open tax years from 2009 through 2015. As of June 30, 2016 and December 31, 2015 , the Company had accrued $7.8 million related to unrecognized tax positions. Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which the Company makes such determination. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is party to various legal proceedings. Management cannot predict the ultimate outcome of these proceedings, individually or in the aggregate, or their resulting effect on the Company’s business, financial position, results of operations or cash flows as litigation and related matters are subject to inherent uncertainties, and unfavorable rulings could occur. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the business, financial position, results of operations, or cash flows for the period in which the ruling occurs and/or future periods. The Company maintains product liability, general liability and excess liability insurance coverage. However, no assurances can be given that such insurance will continue to be available at an acceptable cost to the Company, that such coverage will be sufficient to cover one or more large claims, or that the insurers will not successfully disclaim coverage as to a pending or future claim. Non-Income Tax Contingencies The Company has reserved for certain state sales and use tax and foreign non-income tax contingencies based on the likelihood of an obligation in accordance with accounting guidance for probable loss contingencies. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded. The Company provides provisions for potential payments of tax to various tax authorities for contingencies related to non-income tax matters, including value-added taxes and sales tax. The Company provides provisions for U.S. state sales taxes in each of the states where the Company has nexus. As of June 30, 2016 and December 31, 2015 , accrued liabilities were $0.3 million related to non-income tax contingencies. While management believes that the assumptions and estimates used to determine this liability are reasonable, the ultimate outcome of those matters cannot presently be determined. The Company believes future payments related to these matters could range from $0 to approximately $4.0 million . Other Litigation The Company is party to various other legal proceedings in several foreign jurisdictions related to value-added tax assessments and other civil litigation. While there is a reasonable possibility that a loss may be incurred, either the losses are not considered to be probable or the Company cannot at this time estimate the loss, if any; therefore, no provision for losses has been provided. The Company believes future payments related to these matters could range from $0 to approximately $0.2 million . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values of each financial instrument. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The following table presents the Company’s hierarchy for its assets, measured at fair value on a recurring basis, as of June 30, 2016 (dollar amounts in thousands): Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Investments available-for-sale U.S. government security funds $ 1,797 $ — $ — $ 1,797 Investment securities 1,275 — — 1,275 Total assets measured at fair value on a recurring basis $ 3,072 $ — $ — $ 3,072 The following table presents the Company’s hierarchy for its assets, measured at fair value on a recurring basis, as of December 31, 2015 (dollar amounts in thousands): Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Investments available-for-sale U.S. government security funds $ 1,772 $ — $ — $ 1,772 Investment securities 1,044 — — 1,044 Total assets measured at fair value on a recurring basis $ 2,816 $ — $ — $ 2,816 Investments available-for-sale — The majority of the Company’s investment portfolio consists of U.S. government security funds. The Level 1 securities are valued using quoted prices for identical assets in active markets including equity securities and U.S. government treasuries. Investment securities — The Company’s trading portfolio consists of various marketable securities that are valued using quoted prices in active markets. For the six months ended June 30, 2016 , and for the year ended December 31, 2015 , there were no fair value measurements using the significant unobservable inputs (Level 3). The carrying amounts reflected on the condensed consolidated balance sheet for cash and cash equivalents, accounts receivable, accounts payable and the revolving credit facility payable approximate fair value due to their short-term nature. During the six months ended June 30, 2016 and 2015 , the Company did not have any re-measurements of non-financial assets at fair value on a nonrecurring basis subsequent to their initial recognition. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Nature’s Sunshine Products, Inc., together with its subsidiaries (hereinafter referred to collectively as the “Company”), is a natural health and wellness company primarily engaged in the manufacturing and direct selling of nutritional and personal care products. The Company is a Utah corporation with its principal place of business in Lehi, Utah, and sells its products to a sales force of independent distributors who use the products themselves or resell them to other independent distributors or consumers. The formulation, manufacturing, packaging, labeling, advertising, distribution and sale of each of the Company’s major product groups are subject to regulation by one or more governmental agencies. The Company markets its products in Australia, Austria, Belarus, Canada, Colombia, Costa Rica, the Czech Republic, Denmark, the Dominican Republic, Ecuador, El Salvador, Finland, Germany, Guatemala, Honduras, Hong Kong, Iceland, Indonesia, Ireland, Italy, Japan, Kazakhstan, Latvia, Lithuania, Malaysia, Mexico, Moldova, Mongolia, the Netherlands, New Zealand, Nicaragua, Norway, Panama, the Philippines, Poland, Russia, Singapore, Slovenia, South Korea, Spain, Sweden, Taiwan, Thailand, Ukraine, the United Kingdom, and the United States. The Company also markets its products through a wholesale model to Australia, Chile, Israel, New Zealand, Norway, Peru, Portugal, Spain and the United Kingdom. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation of the Company’s financial information as of June 30, 2016 , and for the three and six -month periods ended June 30, 2016 and 2015 . The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the fiscal year ending December 31, 2016 . It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 Revenue from Contracts with Customers (Topic 606). This update requires an entity to recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. As such, this update affects an entity that either enters into contracts with customers or transfers goods and services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. This update will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. In April 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers - Identifying Performance Obligations and Licensing , which further clarifies the implementation guidance relating to identifying performance obligations and the licensing implementation guidance. These standards, pursuant to ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date issued by the FASB in August 2015, will be effective for the Company in the first quarter of 2018. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements: "Going Concern" (Subtopic 205-40). The purpose of this ASU is to incorporate into U.S. Generally Accepted Accounting Principles ("U.S. GAAP") management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued, and to provide related footnote disclosures. This update is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This update specifies that inventory should be subsequently measured at the lower of cost or net realizable value, which is the ordinary selling price less any completion, transportation and disposal costs. However, the ASU does not apply to inventory measured using the last-in-first-out or retail methods. This update is effective for interim and annual periods beginning after December 15, 2016. Adoption of the ASU is prospective. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This guidance requires that entities with a classified statement of financial position present all deferred tax assets and liabilities as noncurrent. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2016, which will require the Company to adopt the new guidance in the first quarter of fiscal 2017. Early adoption is permitted for financial statements that have not been previously issued and may be applied on either a prospective or retrospective basis. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This update amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. This update is effective for interim and annual periods beginning after December 15, 2017. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations, consolidated financial statements and footnote disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases . This update specifies that lessees should recognize assets and liabilities arising from all leases, except for leases with a lease term of 12 months or less. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and continue to depend on its classification as a finance or operating lease. For public companies, the ASU will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations; however, it is expected to gross-up the consolidated balance sheet. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company is currently in the process of evaluating the impact of the adoption on its financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of operating results of the entity's discontinued operations | The following table summarizes the operating results of the Company’s discontinued operations (dollar amounts in thousands): June 30, June 30, Net sales revenue $ — $ — Income before income tax provision $ — $ 1,312 Income tax provision — — Income from discontinued operations $ — $ 1,312 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of composition of inventories | The composition of inventories is as follows (dollar amounts in thousands): June 30, December 31, Raw materials $ 14,728 $ 13,351 Work in progress 1,038 789 Finished goods 29,236 24,355 Total inventory $ 45,002 $ 38,495 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost and estimated fair values of available-for-sale securities by balance sheet classification | The amortized cost and estimated fair values of available-for-sale securities by balance sheet classification are as follows (dollar amounts in thousands): As of June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities funds $ 1,793 $ 4 $ — $ 1,797 Total short-term investment securities $ 1,793 $ 4 $ — $ 1,797 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities funds $ 1,794 $ — $ (22 ) $ 1,772 Total short-term investment securities $ 1,794 $ — $ (22 ) $ 1,772 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerator and denominator of Basic EPS to the numerator and denominator of Diluted EPS | Following is a reconciliation of the numerator and denominator of Basic EPS to the numerator and denominator of Diluted EPS for the three and six months ended June 30, 2016 and 2015 (dollar and share amounts in thousands, except for per share information): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net income attributable to common shareholders: Net income from continued operations $ 2,568 $ 2,561 $ 4,637 $ 6,916 Income from discontinued operations $ — $ — $ — $ 1,312 Net income $ 2,568 $ 2,561 $ 4,637 $ 8,228 Basic weighted average shares outstanding 18,723 18,720 18,708 18,671 Basic earnings per share attributable to common shareholders: Net income from continued operations $ 0.14 $ 0.13 $ 0.25 $ 0.35 Income from discontinued operations $ — $ — $ — $ 0.07 Net income $ 0.14 $ 0.14 $ 0.25 $ 0.44 Diluted shares outstanding Basic weighted-average shares outstanding 18,723 18,720 18,708 18,671 Stock-based awards 217 524 238 486 Diluted weighted-average shares outstanding 18,940 19,244 18,946 19,157 Diluted earnings per share attributable to common shareholders: Net income from continued operations $ 0.14 $ 0.12 $ 0.24 $ 0.34 Income from discontinued operations $ — $ — $ — $ 0.07 Net income $ 0.14 $ 0.13 $ 0.24 $ 0.43 Potentially dilutive shares excluded from diluted-per-share amounts: Stock options 86 348 86 348 Potentially anti-dilutive shares excluded from diluted-per-share amounts: Stock options 1,445 691 1,445 641 |
Capital Transactions (Tables)
Capital Transactions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Capital Transactions | |
Schedule of stock option activity | Stock option activity for the six -month period ended June 30, 2016 , is as follows (amounts in thousands, except per share information): Number of Shares Weighted Average Exercise Price Per Share Options outstanding at December 31, 2015 1,683 $ 12.21 Granted — — Forfeited or canceled (59 ) 11.77 Exercised (25 ) 2.35 Options outstanding at June 30, 2016 1,599 12.39 |
Schedule of restricted stock unit activity | RSU activity for the six -month period ended June 30, 2016 , is as follows (amounts in thousands, except per share information): Number of Shares Weighted Average Grant Date Fair Value Restricted Stock Units outstanding at December 31, 2015 744 $ 12.48 Granted 206 8.61 Forfeited (10 ) 11.73 Issued (154 ) 13.05 Restricted Stock Units outstanding at June 30, 2016 786 11.38 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of reportable business segment information | Reportable business segment information is as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net sales revenue: NSP Americas $ 44,725 $ 45,050 $ 89,908 $ 91,560 NSP Russia, Central and Eastern Europe 6,269 6,815 12,621 14,258 Synergy WorldWide 33,013 28,480 62,861 57,248 China and New Markets 5,359 902 6,378 2,059 Total net sales revenue 89,366 81,247 171,768 165,125 Contribution margin (1): NSP Americas 19,103 19,027 38,020 38,547 NSP Russia, Central and Eastern Europe 2,065 2,314 4,246 4,910 Synergy WorldWide 10,245 8,820 19,184 17,868 China and New Markets 4,084 415 4,552 911 Total contribution margin 35,497 30,576 66,002 62,236 Selling, general and administrative (2) 31,249 27,392 59,634 53,722 Operating income 4,248 3,184 6,368 8,514 Other income (expense), net (622 ) (2 ) 937 (320 ) Income from continuing operations before provision for income taxes $ 3,626 $ 3,182 $ 7,305 $ 8,194 _________________________________________ (1) Contribution margin consists of net sales revenue less cost of sales and volume incentives expense. For the China and New Markets segment, contribution margin does not includes services fees related to pre-opening product sales through Hong Kong. (2) Service fees in the China and New Markets segment related to pre-opening product sales through Hong Kong totaled $2.0 million for the three and six month periods ended June 30, 2016, and $0.0 million for the three and six month periods ended June 30, 2015. These service fees are included in selling, general and administrative expense. |
Schedule of consolidated net sales revenue by geographical locations | From an individual country perspective, only the United States and South Korea comprise 10 percent or more of consolidated net sales revenue for the three and six -month periods ended June 30, 2016 and 2015 , as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net sales revenue: United States $ 37,598 $ 37,054 $ 75,893 $ 75,576 South Korea 15,473 12,070 28,671 24,150 Other 36,295 32,123 67,204 65,399 $ 89,366 $ 81,247 $ 171,768 $ 165,125 |
Schedule of revenue generated by each of the Company's product lines | Revenue generated by each of the Company’s product lines is set forth below (dollar amounts in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 NSP Americas: General health $ 20,234 $ 19,456 $ 39,851 $ 39,488 Immune 3,738 5,038 9,314 11,255 Cardiovascular 3,418 3,543 6,530 6,644 Digestive 11,845 13,263 24,924 26,628 Personal care 2,853 870 3,783 1,840 Weight management 2,637 2,880 5,506 5,705 44,725 45,050 89,908 91,560 NSP Russia, Eastern and Central Europe: General health $ 2,501 $ 2,799 $ 5,224 $ 5,678 Immune 857 763 1,397 1,676 Cardiovascular 493 446 970 899 Digestive 1,407 1,852 3,528 3,822 Personal care 853 627 1,102 1,509 Weight management 158 328 400 674 6,269 6,815 12,621 14,258 Synergy WorldWide: General health $ 9,694 $ 7,645 $ 18,334 $ 15,347 Immune 41 84 250 277 Cardiovascular 13,505 12,411 26,198 25,067 Digestive 3,442 2,374 5,929 4,668 Personal care 1,948 1,732 3,887 3,562 Weight management 4,383 4,234 8,263 8,327 33,013 28,480 62,861 57,248 China and New Markets: General health $ 1,537 $ 426 $ 2,008 $ 957 Immune 216 103 347 261 Cardiovascular 1,450 73 1,523 154 Digestive 1,262 225 1,522 515 Personal care 439 19 461 46 Weight management 455 56 517 126 5,359 902 6,378 2,059 $ 89,366 $ 81,247 $ 171,768 $ 165,125 |
Schedule of consolidated property, plant and equipment by geographical locations | From an individual country perspective, only the United States comprised 10 percent or more of consolidated property, plant and equipment as follows (dollar amounts in thousands): June 30, December 31, Property, plant and equipment: United States $ 68,089 $ 66,044 Other 2,334 2,684 Total property, plant and equipment $ 70,423 $ 68,728 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Company's hierarchy for assets measured at fair value on a recurring basis | The following table presents the Company’s hierarchy for its assets, measured at fair value on a recurring basis, as of June 30, 2016 (dollar amounts in thousands): Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Investments available-for-sale U.S. government security funds $ 1,797 $ — $ — $ 1,797 Investment securities 1,275 — — 1,275 Total assets measured at fair value on a recurring basis $ 3,072 $ — $ — $ 3,072 The following table presents the Company’s hierarchy for its assets, measured at fair value on a recurring basis, as of December 31, 2015 (dollar amounts in thousands): Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Investments available-for-sale U.S. government security funds $ 1,772 $ — $ — $ 1,772 Investment securities 1,044 — — 1,044 Total assets measured at fair value on a recurring basis $ 2,816 $ — $ — $ 2,816 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Noncontrolling Interest [Line Items] | |||||
Net income | $ 2,366 | $ 2,395 | $ 4,155 | $ 7,910 | |
Total shareholders’ equity | 138,618 | 138,618 | $ 136,265 | ||
Noncontrolling Interest | |||||
Noncontrolling Interest [Line Items] | |||||
Net income | (482) | (300) | |||
Total shareholders’ equity | $ 2,268 | $ 3,500 | $ 2,268 | $ 3,500 | $ 2,750 |
Basis of Presentation - Restruc
Basis of Presentation - Restructuring Related Activities (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 0 | $ 2,100,000 | $ 3,300,000 |
Severance costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserve | 0 | 600,000 | |
Other exit costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring reserve | $ 100,000 | $ 200,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Discontinued operations | ||||
Income (loss) from discontinued operations | $ 0 | $ 0 | $ 0 | $ 1,312 |
Net proceeds from sale of fixed assets | 0 | $ 1,373 | ||
Subsidiary in Venezuela | ||||
Discontinued operations | ||||
Net sales revenue | 0 | 0 | ||
Income before income tax provision | 0 | 1,312 | ||
Income tax provision | 0 | 0 | ||
Income (loss) from discontinued operations | $ 0 | $ 1,312 | ||
Net proceeds from sale of fixed assets | $ 1,300 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,728 | $ 13,351 |
Work in progress | 1,038 | 789 |
Finished goods | 29,236 | 24,355 |
Total inventory | $ 45,002 | $ 38,495 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 1,793 | $ 1,794 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | 0 | (22) |
Fair Value | 1,797 | 1,772 |
U.S. government security funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,793 | 1,794 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | 0 | (22) |
Fair Value | $ 1,797 | $ 1,772 |
Investments (Details 2)
Investments (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Proceeds from the sales of available-for-sale securities | $ 0 | $ 0 | |
Trading securities portfolio | 1,275,000 | $ 1,044,000 | |
Gains on trading securities | 35,000 | $ 21,000 | |
Gross Unrealized Gains | 4,000 | 0 | |
Gross Unrealized Losses | 0 | (22,000) | |
Securities in a loss position for more than 12 months | 0 | 0 | |
U.S. government security funds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross Unrealized Gains | 4,000 | 0 | |
Gross Unrealized Losses | $ 0 | $ (22,000) |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - Revolving credit agreement - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Long-term debt | ||
Maximum borrowing capacity | $ 25,000,000 | |
Annual commitment fee | 0.25% | |
Long-term debt less current installments | $ 3,900,000 | $ 2,700,000 |
LIBOR | ||
Long-term debt | ||
Margin on variable rate | 1.25% | |
Effective interest rate | 1.75% | 1.75% |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net income attributable to common shareholders: | ||||
Net income from continued operations | $ 2,568 | $ 2,561 | $ 4,637 | $ 6,916 |
Income from discontinued operations | 0 | 0 | 0 | 1,312 |
Net income | $ 2,568 | $ 2,561 | $ 4,637 | $ 8,228 |
Basic weighted-average shares outstanding (in shares) | 18,723 | 18,720 | 18,708 | 18,671 |
Basic earnings per share attributable to common shareholders: | ||||
Net income from continued operations (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.25 | $ 0.35 |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.07 |
Net income (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.25 | $ 0.44 |
Diluted shares outstanding | ||||
Basic weighted-average shares outstanding (in shares) | 18,723 | 18,720 | 18,708 | 18,671 |
Stock-based awards (in shares) | 217 | 524 | 238 | 486 |
Diluted weighted-average shares outstanding (in shares) | 18,940 | 19,244 | 18,946 | 19,157 |
Diluted earnings per share attributable to common shareholders: | ||||
Net income from continued operations (in dollars per share) | $ 0.14 | $ 0.12 | $ 0.24 | $ 0.34 |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0.07 |
Net income (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.24 | $ 0.43 |
Potentially dilutive shares excluded from diluted-per-share amounts: | ||||
Stock options (in shares) | 86 | 348 | 86 | 348 |
Potentially anti-dilutive shares excluded from diluted-per-share amounts: | ||||
Stock options (in shares) | 1,445 | 691 | 1,445 | 641 |
Capital Transactions (Details)
Capital Transactions (Details) - USD ($) | May 10, 2016 | Feb. 25, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Nov. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Cash dividend per common share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.2 | $ 0.2 | ||
Payments of cash dividends | $ 1,900,000 | $ 1,900,000 | $ 3,756,000 | $ 3,740,000 | ||||
Weighted Average Exercise Price Per Share | ||||||||
Granted (in dollars per share) | $ 0 | |||||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercisable (in shares) | 1,141,000 | 1,141,000 | 958,000 | |||||
Expected to vest (in shares) | 377,000 | 377,000 | 588,000 | |||||
Aggregate Intrinsic value, outstanding | $ 600,000 | $ 600,000 | $ 900,000 | |||||
Aggregate Intrinsic value, exercisable | 600,000 | 600,000 | 900,000 | |||||
Aggregate intrinsic values of options exercised | 200,000 | 1,400,000 | ||||||
Aggregate Intrinsic value, expected to vest | $ 0 | 0 | 0 | |||||
Tax benefit from the exercise of stock options | $ 100,000 | $ 100,000 | $ 500,000 | |||||
Number of shares | ||||||||
Options outstanding at the beginning of the period (in shares) | 1,683,000 | |||||||
Granted (in shares) | 0 | |||||||
Forfeited or canceled (in shares) | (59,000) | |||||||
Exercised (in shares) | (25,000) | (373,000) | ||||||
Options outstanding at the end of the period (in shares) | 1,599,000 | 1,599,000 | ||||||
Weighted Average Exercise Price Per Share | ||||||||
Options outstanding at the beginning of the period (in dollars per share) | $ 12.21 | |||||||
Forfeited or canceled (in dollars per share) | 11.77 | |||||||
Exercised (in dollars per share) | 2.35 | $ 9.58 | ||||||
Options outstanding at the end of the period (in dollars per share) | $ 12.39 | $ 12.39 | ||||||
Performance based stock options operating income margins | ||||||||
Share-based compensation, additional disclosures | ||||||||
Operating income margin, one (as a percent) | 6.00% | |||||||
Operating income margin, two (as a percent) | 8.00% | |||||||
Operating income margin, three (as a percent) | 10.00% | |||||||
Performance based stock options sales and operating income margins | ||||||||
Share-based compensation, additional disclosures | ||||||||
Vesting period | 2 years | |||||||
Performance based stock options sales and operating income margins | Minimum | ||||||||
Share-based compensation, additional disclosures | ||||||||
Operating income margin, two (as a percent) | 8.00% | |||||||
Performance based stock options sales | ||||||||
Share-based compensation, additional disclosures | ||||||||
Vesting period based on achieving annual net sales targets | 1 year | |||||||
Performance based stock options sales | Maximum | ||||||||
Share-based compensation, related information | ||||||||
Potential compensation expense | $ 400,000 | $ 400,000 | ||||||
Time-based stock options | ||||||||
Share-based compensation, related information | ||||||||
Share-based compensation expense | 200,000 | $ 200,000 | 400,000 | $ 700,000 | ||||
Unrecognized share-based compensation expense | $ 600,000 | $ 600,000 | $ 1,100,000 | |||||
Weighted-average period over which the remaining compensation cost is expected to be recognized | 1 year 3 months | |||||||
Time-based stock options | Maximum | ||||||||
Share-based compensation, additional disclosures | ||||||||
Vesting period | 48 months | |||||||
2012 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized under the plan | 1,500,000 | |||||||
Additional number of shares authorized under the plan | 1,500,000 | |||||||
2009 Incentive Plan | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized under the plan | 400,000 | 400,000 | ||||||
2014 Share Repurchase Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock repurchase program, authorized amount | $ 20,000,000 | |||||||
Remaining balance available for repurchases | $ 13,400,000 | $ 13,400,000 | ||||||
Repurchase of common stock (in shares) | 0 |
Capital Transactions (Details 2
Capital Transactions (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
RSUs | |||||
Share-based compensation, additional disclosures | |||||
Share-based compensation expense | $ 500,000 | $ 600,000 | $ 1,100,000 | $ 1,300,000 | |
Unrecognized share-based compensation expense | 2,500,000 | $ 2,500,000 | $ 2,500,000 | ||
Weighted-average period over which the remaining compensation expense is expected to be recognized | 1 year 7 months 18 days | ||||
Minimum statutory withholding requirement paid on behalf of employees (in shares) | 20,000 | ||||
Performance-based RSUs | |||||
Share-based compensation, additional disclosures | |||||
Share-based compensation expense | $ 0 | $ 0 | |||
Performance-based RSUs | Maximum | |||||
Share-based compensation, additional disclosures | |||||
Potential compensation expense | $ 3,300,000 | $ 3,300,000 | |||
2012 Stock Incentive Plan | RSUs | |||||
Number of Shares | |||||
Units outstanding at the beginning of the period (in shares) | 744,000 | ||||
Granted (in shares) | 206,000 | ||||
Forfeited (in shares) | (154,000) | ||||
Issued (in shares) | (10,000) | ||||
Units outstanding at the end of the period (in shares) | 786,000 | 786,000 | |||
Weighted Average Grant Date Fair Value | |||||
Units outstanding at the beginning of the period (in dollars per share) | $ 12.48 | ||||
Granted (in dollars per share) | 8.61 | ||||
Forfeited (in dollars per share) | 13.05 | ||||
Issued (in dollars per share) | 11.73 | ||||
Units outstanding at the end of the period (in dollars per share) | $ 11.38 | $ 11.38 | |||
2012 Stock Incentive Plan | RSUs | Minimum | |||||
Share-based compensation, additional disclosures | |||||
Vesting period | 12 months | ||||
2012 Stock Incentive Plan | RSUs | Maximum | |||||
Share-based compensation, additional disclosures | |||||
Vesting period | 48 months | ||||
2012 Stock Incentive Plan | RSUs | Board of Directors | |||||
Number of Shares | |||||
Number of shares subject to restriction period | 44,000 | 44,000 | 60,000 | ||
Restriction period | 2 years | ||||
2012 Stock Incentive Plan | Performance-based RSUs | |||||
Share-based compensation, additional disclosures | |||||
Weighted-average grant date fair value (in dollars per share) | $ 13.05 | ||||
2012 Stock Incentive Plan | Time-based RSUs | |||||
Share-based compensation, additional disclosures | |||||
Vesting period | 3 years | ||||
Weighted-average grant date fair value (in dollars per share) | $ 8.61 | ||||
2012 Stock Incentive Plan | Net Sales and Operating Income Targets [Member] | Performance-based RSUs | |||||
Share-based compensation, additional disclosures | |||||
Vesting period | 3 years | ||||
2012 Stock Incentive Plan | Earnings Per Share Targets [Member] | Performance-based RSUs | |||||
Share-based compensation, additional disclosures | |||||
Vesting period | 6 years |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)segment | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment information | |||||
Number of business segments | segment | 4 | ||||
Number of operating segments | segment | 3 | ||||
Net sales revenue: | |||||
Total net sales revenue | $ 89,366 | $ 81,247 | $ 171,768 | $ 165,125 | |
Contribution margin: | |||||
Total contribution margin | 35,497 | 30,576 | 66,002 | 62,236 | |
Selling, general and administrative | 31,249 | 27,392 | 59,634 | 53,722 | |
Operating income | 4,248 | 3,184 | 6,368 | 8,514 | |
Other income (expense), net | (622) | (2) | 937 | (320) | |
Income from continuing operations before provision for income taxes | 3,626 | 3,182 | 7,305 | 8,194 | |
Property, plant and equipment | |||||
Total property, plant and equipment | 70,423 | 70,423 | $ 68,728 | ||
United States | |||||
Net sales revenue: | |||||
Total net sales revenue | 37,598 | 37,054 | 75,893 | 75,576 | |
Property, plant and equipment | |||||
Total property, plant and equipment | 68,089 | 68,089 | 66,044 | ||
Other | |||||
Net sales revenue: | |||||
Total net sales revenue | 36,295 | 32,123 | 67,204 | 65,399 | |
Property, plant and equipment | |||||
Total property, plant and equipment | 2,334 | 2,334 | $ 2,684 | ||
South Korea (Synergy) | |||||
Net sales revenue: | |||||
Total net sales revenue | 15,473 | 12,070 | 28,671 | 24,150 | |
NSP Americas | |||||
Net sales revenue: | |||||
Total net sales revenue | 44,725 | 45,050 | 89,908 | 91,560 | |
Contribution margin: | |||||
Total contribution margin | 19,103 | 19,027 | 38,020 | 38,547 | |
NSP Americas | General health | |||||
Net sales revenue: | |||||
Total net sales revenue | 20,234 | 19,456 | 39,851 | 39,488 | |
NSP Americas | Immune | |||||
Net sales revenue: | |||||
Total net sales revenue | 3,738 | 5,038 | 9,314 | 11,255 | |
NSP Americas | Cardiovascular | |||||
Net sales revenue: | |||||
Total net sales revenue | 3,418 | 3,543 | 6,530 | 6,644 | |
NSP Americas | Digestive | |||||
Net sales revenue: | |||||
Total net sales revenue | 11,845 | 13,263 | 24,924 | 26,628 | |
NSP Americas | Personal care | |||||
Net sales revenue: | |||||
Total net sales revenue | 2,853 | 870 | 3,783 | 1,840 | |
NSP Americas | Weight management | |||||
Net sales revenue: | |||||
Total net sales revenue | 2,637 | 2,880 | 5,506 | 5,705 | |
NSP Russia, Central and Eastern Europe | |||||
Net sales revenue: | |||||
Total net sales revenue | 6,269 | 6,815 | 12,621 | 14,258 | |
Contribution margin: | |||||
Total contribution margin | 2,065 | 2,314 | 4,246 | 4,910 | |
NSP Russia, Central and Eastern Europe | General health | |||||
Net sales revenue: | |||||
Total net sales revenue | 2,501 | 2,799 | 5,224 | 5,678 | |
NSP Russia, Central and Eastern Europe | Immune | |||||
Net sales revenue: | |||||
Total net sales revenue | 857 | 763 | 1,397 | 1,676 | |
NSP Russia, Central and Eastern Europe | Cardiovascular | |||||
Net sales revenue: | |||||
Total net sales revenue | 493 | 446 | 970 | 899 | |
NSP Russia, Central and Eastern Europe | Digestive | |||||
Net sales revenue: | |||||
Total net sales revenue | 1,407 | 1,852 | 3,528 | 3,822 | |
NSP Russia, Central and Eastern Europe | Personal care | |||||
Net sales revenue: | |||||
Total net sales revenue | 853 | 627 | 1,102 | 1,509 | |
NSP Russia, Central and Eastern Europe | Weight management | |||||
Net sales revenue: | |||||
Total net sales revenue | 158 | 328 | 400 | 674 | |
Synergy WorldWide | |||||
Net sales revenue: | |||||
Total net sales revenue | 33,013 | 28,480 | 62,861 | 57,248 | |
Contribution margin: | |||||
Total contribution margin | 10,245 | 8,820 | 19,184 | 17,868 | |
Synergy WorldWide | General health | |||||
Net sales revenue: | |||||
Total net sales revenue | 9,694 | 7,645 | 18,334 | 15,347 | |
Synergy WorldWide | Immune | |||||
Net sales revenue: | |||||
Total net sales revenue | 41 | 84 | 250 | 277 | |
Synergy WorldWide | Cardiovascular | |||||
Net sales revenue: | |||||
Total net sales revenue | 13,505 | 12,411 | 26,198 | 25,067 | |
Synergy WorldWide | Digestive | |||||
Net sales revenue: | |||||
Total net sales revenue | 3,442 | 2,374 | 5,929 | 4,668 | |
Synergy WorldWide | Personal care | |||||
Net sales revenue: | |||||
Total net sales revenue | 1,948 | 1,732 | 3,887 | 3,562 | |
Synergy WorldWide | Weight management | |||||
Net sales revenue: | |||||
Total net sales revenue | 4,383 | 4,234 | 8,263 | 8,327 | |
China and New Markets | |||||
Net sales revenue: | |||||
Total net sales revenue | 5,359 | 902 | 6,378 | 2,059 | |
Contribution margin: | |||||
Total contribution margin | 4,084 | 415 | 4,552 | 911 | |
China and New Markets | General health | |||||
Net sales revenue: | |||||
Total net sales revenue | 1,537 | 426 | 2,008 | 957 | |
China and New Markets | Immune | |||||
Net sales revenue: | |||||
Total net sales revenue | 216 | 103 | 347 | 261 | |
China and New Markets | Cardiovascular | |||||
Net sales revenue: | |||||
Total net sales revenue | 1,450 | 73 | 1,523 | 154 | |
China and New Markets | Digestive | |||||
Net sales revenue: | |||||
Total net sales revenue | 1,262 | 225 | 1,522 | 515 | |
China and New Markets | Personal care | |||||
Net sales revenue: | |||||
Total net sales revenue | 439 | 19 | 461 | 46 | |
China and New Markets | Weight management | |||||
Net sales revenue: | |||||
Total net sales revenue | 455 | 56 | 517 | 126 | |
China and New Markets | Hong Kong | |||||
Contribution margin: | |||||
Selling, general and administrative | $ 2,000 | $ 0 | $ 2,000 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Provision (benefit) for income taxes, as a percentage of income before income taxes | 34.70% | 24.70% | 43.10% | 19.50% | |
Statutory U.S. federal income tax rate | 35.00% | 35.00% | |||
Liability related to unrecognized tax benefits | $ 7,811 | $ 7,811 | $ 7,809 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 6 Months Ended | |
Jun. 30, 2016USD ($)claim | Dec. 31, 2015USD ($) | |
Value-added tax assessments and other civil litigation | ||
Commitments and contingencies | ||
Minimum number of claims that the Company's insurance coverage may not be sufficient to cover | claim | 1 | |
Provision for losses | $ 0 | |
Non-Income Tax Contingencies | ||
Commitments and contingencies | ||
Accrued liabilities | 300,000 | $ 300,000 |
Minimum | Value-added tax assessments and other civil litigation | ||
Commitments and contingencies | ||
Estimate of possible loss | 0 | |
Minimum | Non-Income Tax Contingencies | ||
Commitments and contingencies | ||
Estimate of possible loss | 0 | |
Maximum | Value-added tax assessments and other civil litigation | ||
Commitments and contingencies | ||
Estimate of possible loss | $ 150,000 | |
Maximum | Non-Income Tax Contingencies | ||
Commitments and contingencies | ||
Estimate of possible loss | $ 4,011,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair value | ||
Investments available-for-sale | $ 1,797 | $ 1,772 |
U.S. government security funds | ||
Fair value | ||
Investments available-for-sale | 1,797 | 1,772 |
Recurring basis | Level 1 - Quoted Prices in Active Markets for Identical Assets | ||
Fair value | ||
Trading investment securities | 1,275 | 1,044 |
Total assets measured at fair value on a recurring basis | 3,072 | 2,816 |
Recurring basis | Level 1 - Quoted Prices in Active Markets for Identical Assets | U.S. government security funds | ||
Fair value | ||
Investments available-for-sale | 1,797 | 1,772 |
Recurring basis | Level 2 - Significant Other Observable Inputs | ||
Fair value | ||
Trading investment securities | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
Recurring basis | Level 2 - Significant Other Observable Inputs | U.S. government security funds | ||
Fair value | ||
Investments available-for-sale | 0 | 0 |
Recurring basis | Level 3 - Significant Unobservable Inputs | ||
Fair value | ||
Trading investment securities | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
Recurring basis | Level 3 - Significant Unobservable Inputs | U.S. government security funds | ||
Fair value | ||
Investments available-for-sale | 0 | 0 |
Total | Recurring basis | ||
Fair value | ||
Trading investment securities | 1,275 | 1,044 |
Total assets measured at fair value on a recurring basis | 3,072 | 2,816 |
Total | Recurring basis | U.S. government security funds | ||
Fair value | ||
Investments available-for-sale | $ 1,797 | $ 1,772 |