Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 27, 2018 | |
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, 2018 | |
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 (in shares) | 19,130,009 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 46,898 | $ 42,910 |
Accounts receivable, net of allowance for doubtful accounts of $631 and $395, respectively | 8,158 | 8,888 |
Assets held for sale | 998 | 998 |
Inventories | 41,281 | 44,047 |
Prepaid expenses and other | 7,061 | 5,666 |
Total current assets | 104,396 | 102,509 |
Property, plant and equipment, net | 66,480 | 69,106 |
Investment securities - trading | 1,545 | 1,980 |
Intangible assets, net | 663 | 709 |
Deferred income tax assets | 8,997 | 8,283 |
Other assets | 12,382 | 12,608 |
Total assets | 194,463 | 195,195 |
Current liabilities: | ||
Accounts payable | 4,224 | 4,215 |
Accrued volume incentives and service fees | 19,145 | 18,774 |
Accrued liabilities | 29,818 | 24,980 |
Deferred revenue | 1,553 | 3,348 |
Income taxes payable | 2,071 | 1,834 |
Related party note payable | 1,025 | 506 |
Total current liabilities | 57,836 | 53,657 |
Liability related to unrecognized tax benefits | 4,761 | 4,633 |
Long-term debt and revolving credit facility | 7,210 | 13,181 |
Deferred compensation payable | 1,545 | 1,980 |
Long-term deferred income tax liabilities | 714 | 770 |
Other liabilities | 737 | 1,242 |
Total liabilities | 72,803 | 75,463 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, no par value, 50,000 shares authorized, 19,130 and 18,919 shares issued and outstanding, respectively | 132,594 | 131,525 |
Accumulated deficit | (653) | (2,072) |
Noncontrolling interests | 117 | 411 |
Accumulated other comprehensive loss | (10,398) | (10,132) |
Total shareholders’ equity | 121,660 | 119,732 |
Total liabilities and shareholders' equity | $ 194,463 | $ 195,195 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 631 | $ 395 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 19,130,000 | 18,919,000 |
Common stock, shares outstanding (in shares) | 19,130,000 | 18,919,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 91,266 | $ 81,344 | $ 178,608 | $ 164,442 |
Cost of sales | 24,278 | 21,197 | 46,991 | 42,925 |
Gross profit | 66,988 | 60,147 | 131,617 | 121,517 |
Operating expenses: | ||||
Volume incentives | 31,492 | 28,288 | 62,854 | 57,271 |
Selling, general and administrative | 33,310 | 31,836 | 65,696 | 62,172 |
Operating income | 2,186 | 23 | 3,067 | 2,074 |
Other income (loss), net | (1,807) | 441 | (1,067) | 1,716 |
Income before provision for income taxes | 379 | 464 | 2,000 | 3,790 |
Provision for income taxes | 441 | 884 | 1,729 | 2,347 |
Net loss | (62) | (420) | 271 | 1,443 |
Net loss attributable to noncontrolling interests | (129) | (233) | (294) | (530) |
Net income (loss) attributable to common shareholders | $ 67 | $ (187) | $ 565 | $ 1,973 |
Basic and diluted net income (loss) per common share: | ||||
Basic earnings (loss) per share attributable to common shareholders (in dollars per share) | $ 0 | $ (0.01) | $ 0.03 | $ 0.10 |
Diluted earnings (loss) per share attributable to common shareholders (in dollars per share) | $ 0 | $ (0.01) | $ 0.03 | $ 0.10 |
Weighted average basic common shares outstanding (in shares) | 19,105 | 18,876 | 19,058 | 18,861 |
Weighted average diluted common shares outstanding (in shares) | 19,402 | 18,876 | 19,408 | 19,251 |
Dividends declared per common share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0.1 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (62) | $ (420) | $ 271 | $ 1,443 |
Foreign currency translation gain (loss) (net of tax) | (53) | (552) | (266) | 360 |
Net unrealized gains on investment securities (net of tax) | 0 | 15 | 0 | 15 |
Total comprehensive income (loss) | $ (115) | $ (957) | $ 5 | $ 1,818 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Deficit | Noncontrolling Interests | Accumulated Other Comprehensive Loss |
Increase (Decrease) in Shareholders' Equity | |||||
Beginning balance, adjusted balance | $ 120,586 | $ 131,525 | $ (1,218) | $ 411 | $ (10,132) |
Cumulative effect of change in accounting principle | $ 854 | 854 | |||
Beginning balance (in shares) at Dec. 31, 2017 | 18,919 | 18,919 | |||
Beginning balance at Dec. 31, 2017 | $ 119,732 | $ 131,525 | (2,072) | 411 | (10,132) |
Increase (Decrease) in Shareholders' Equity | |||||
Share-based compensation expense | 1,124 | $ 1,124 | |||
Shares issued from the exercise of stock options and vesting of restricted stock units, net of shares exchanged for withholding tax (in shares) | 211 | ||||
Shares issued from the exercise of stock options and vesting of restricted stock units, net of shares exchanged for withholding tax | (55) | $ (55) | |||
Net income (loss) | 271 | 565 | (294) | ||
Other comprehensive loss | $ (266) | (266) | |||
Ending balance (in shares) at Jun. 30, 2018 | 19,130 | 19,130 | |||
Ending balance at Jun. 30, 2018 | $ 121,660 | $ 132,594 | $ (653) | $ 117 | $ (10,398) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 271 | $ 1,443 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Provision for (recovery of) doubtful accounts | 255 | (22) |
Depreciation and amortization | 5,012 | 3,585 |
Share-based compensation expense | 1,124 | 1,762 |
Gain on sale of property and equipment | (2,267) | (10) |
Deferred income taxes | (744) | 263 |
Purchase of trading investment securities | (96) | (367) |
Proceeds from sale of trading investment securities | 566 | 73 |
Realized and unrealized gains on investments | (11) | (79) |
Foreign exchange (gains) losses | 834 | (1,882) |
Changes in assets and liabilities: | ||
Accounts receivable | 369 | (1,429) |
Inventories | 2,317 | (2,359) |
Prepaid expenses and other current assets | (1,471) | (1,221) |
Other assets | (164) | 358 |
Accounts payable | (28) | 109 |
Accrued volume incentives and service fees | 673 | 1,082 |
Accrued liabilities | 4,762 | (3,542) |
Deferred revenue | (1,795) | 1,586 |
Income taxes payable | 197 | (636) |
Liability related to unrecognized tax benefits | 68 | 207 |
Deferred compensation payable | (435) | 395 |
Net cash provided by (used in) operating activities | 9,437 | (684) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (2,671) | (3,134) |
Proceeds from sale of property, plant and equipment | 2,558 | 522 |
Proceeds from sale/maturities of investments available for sale | 0 | 1,776 |
Net cash used in investing activities | (113) | (836) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments of cash dividends | 0 | (1,886) |
Principal payments of new revolving credit facility | (33,483) | 0 |
Borrowings on new revolving credit facility | 27,512 | 0 |
Net borrowings on previous revolving credit facility | 0 | 2,035 |
Proceeds from related party borrowing | 500 | 0 |
Net proceeds from the exercise of stock options | 410 | 104 |
Payment of withholding taxes related to the vesting of restricted stock units | (465) | (512) |
Net cash used in financing activities | (5,526) | (259) |
Effect of exchange rates on cash and cash equivalents | 190 | 1,316 |
Net increase (decrease) in cash and cash equivalents | 3,988 | (463) |
Cash and cash equivalents at the beginning of the period | 42,910 | 32,284 |
Cash and cash equivalents at the end of the period | 46,898 | 31,821 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes, net of refunds | 2,272 | 2,418 |
Cash paid for interest | $ 160 | $ 108 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
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 sells its products to a sales force of independent distributors who use the products themselves or resell them to consumers. 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 intercompany accounts and transactions are eliminated in consolidation. The Company consolidates the joint ventures in Hong Kong and China in its consolidated financial statements, with another party's interest presented as noncontrolling interest. 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, 2018 , and for the three and six -month periods ended June 30, 2018 and 2017 . The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2018 . 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, 2017 . Noncontrolling Interests Noncontrolling interests decreased as a result of the net loss attributable to the noncontrolling interests by $0.3 million and $0.5 million during the six months ended June 30, 2018 and 2017 , respectively. As of June 30, 2018 , and December 31, 2017 , noncontrolling interests were $0.1 million and $0.4 million , respectively. Restructuring Related Accruals and Expenses Accrued severance and rent costs were $0.4 million and $0.8 million as of June 30, 2018 and December 31, 2017 , respectively. The Company did not record any additional restructuring related expenses during the three and six months ended June 30, 2018 and 2017 , respectively. Chief Executive Officer Related Transition Costs During the second quarter of 2018, the Company announced the pending retirement of its Chief Executive Officer. As a result, the Company recorded $1.5 million of transition related expenses during the three- and six-month periods ended June 30, 2018. As of June 30, 2018, accrued transitions costs were $1.4 million . Recent Accounting Pronouncements The Company adopted the requirements of revenue recognition from Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (“Topic 606”) effective January 1, 2018 under the modified retrospective approach. The cumulative effect of adopting Topic 606 on January 1, 2018 was a decrease to accumulated deficit of $0.9 million (net of tax). See Note 13 - Revenue Recognition for additional disclosure of the adoption of Topic 606. In January 2016, the Financial Accounting Standards Board ("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 did not 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 shall continue to depend on its classification as a finance or operating lease. The ASU will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The adoption of this ASU will impact the classification of expenses on the statement of operations, primarily the classification between rent expense and interest expense, but is not expected to have a material impact on the Company’s net results of operations; however, it is also expected to gross-up the consolidated balance sheet as a result of recognizing a lease asset along with a similar lease liability. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of ASU 2017-09 did not have a material effect on the Company's results of operations, consolidated financial statements and footnote disclosures. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Effects from Accumulated Other Comprehensive Income. This update allows a reclassification of stranded tax effects, resulting from the Tax Cuts and Jobs Act 2017, from accumulated other comprehensive income to retained earnings. This ASU will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The composition of inventories is as follows (dollar amounts in thousands): June 30, December 31, Raw materials $ 10,384 $ 9,522 Work in progress 1,960 2,153 Finished goods 28,937 32,372 Total inventories $ 41,281 $ 44,047 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment As of June 30, 2018 and December 31, 2017, the Company presented an eight -acre property in Provo, Utah, as an asset held for sale. The Company originally acquired the property with the intent to erect a building for the corporate headquarters. As there is no intention to move the corporate headquarters to this location, Company management decided to sell the property. The property is currently under contract to sell. The Company anticipates the sale of the property to be completed during 2018. As the fair value of the property exceeds the carrying value, no loss was recognized during the three and six months ended June 30, 2018 and 2017, respectively. In June of 2018, the Company sold a 29,300 square foot building in Mexico City, Mexico for $2.6 million . The Company previously utilized the building for offices as well as warehouse space and has since relocated to a more advantageous location. As the fair value of the property exceeded the carrying value, a net gain of $2.3 million was recognized during the three and six months ended June 30, 2018 . |
Investment Securities - Trading
Investment Securities - Trading | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities - Trading | Investment Securities - Trading The Company’s trading securities portfolio totaled $1.5 million at June 30, 2018 , and $2.0 million at December 31, 2017 , and generated gains of $34,000 and $51,000 for the three months ended June 30, 2018 and 2017 , respectively, and $34,000 and $102,000 for the six months ended June 30, 2018 and 2017 , respectively. |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility On July 11, 2017, the Company entered into a revolving credit agreement with Bank of America, N.A., with a borrowing limit of $25.0 million , that matures on July 11, 2020 (the “Credit Agreement”). The Company pays interest on any borrowings under the Credit Agreement at LIBOR plus 1.25 percent ( 3.34 percent and 2.82 percent as of June 30, 2018 and December 31, 2017 ), and an annual commitment fee of 0.2 percent on the unused portion of the commitment. The Company is required to settle its net borrowings under the Credit Agreement only upon maturity, and as a result, has classified its outstanding borrowings as non-current on its condensed consolidated balance sheet as of June 30, 2018 . At June 30, 2018 , the outstanding balance under the Credit Agreement was $7.2 million . The Credit Agreement contains customary financial covenants, including financial covenants relating to the Company’s solvency, leverage, and minimum EBITDA. In addition, the Credit Agreement restricts certain capital expenditures, lease expenditures, other indebtedness, liens on assets, guarantees, loans and advances, dividends, and merger, consolidation and the transfer of assets except as permitted in the Credit Agreement. The Credit Agreement is collateralized by the Company's manufacturing facility, accounts receivable balance, inventory balance and other assets. Effective June 30, 2018, the Company and Bank of America amended the Credit Agreement to modify certain financial covenants. As of June 30, 2018 , the Company was in compliance with the debt covenants set forth in the Credit Agreement. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per common share (“Basic EPS”), is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) 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 (loss) 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, 2018 and 2017 (dollar and share amounts in thousands, except for per share information): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net income (loss) attributable to common shareholders $ 67 $ (187 ) $ 565 $ 1,973 Basic weighted average shares outstanding 19,105 18,876 19,058 18,861 Basic earnings (loss) per share attributable to common shareholders $ — $ (0.01 ) $ 0.03 $ 0.10 Diluted shares outstanding: Basic weighted-average shares outstanding 19,105 18,876 19,058 18,861 Stock-based awards 297 — 350 390 Diluted weighted-average shares outstanding 19,402 18,876 19,408 19,251 Diluted earnings (loss) per share attributable to common shareholders $ — $ (0.01 ) $ 0.03 $ 0.10 Dilutive shares excluded from diluted-per-share amounts: Stock options 330 — (1) 330 371 Anti-dilutive shares excluded from diluted-per-share amounts: Stock options 1,160 2,444 (1) 1,160 1,363 (1) As a result of the net loss for the three months ended June 30, 2017, no potentially dilutive securities are included in the calculation of diluted earnings (loss) per share because such effect would be anti-dilutive. Potentially dilutive securities include 1,540 outstanding options to purchase shares of common stock and 904 restricted stock units. 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 (loss) per share for each of the periods presented. |
Capital Transactions
Capital Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Capital Transactions | Capital Transactions 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 of time ranging from the date of issuance to up to 48 months from the option grant date, and 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. Stock option activity for the six -month period ended June 30, 2018 , is as follows (amounts in thousands, except per share information): Number of Shares Weighted Average Exercise Price Per Share Options outstanding at December 31, 2017 1,390 $ 12.20 Granted 25 9.05 Forfeited or canceled (78 ) 16.31 Exercised (69 ) 5.11 Options outstanding at June 30, 2018 1,268 12.27 During the six months ended June 30, 2018, the Company granted options to purchase 25,000 share of common stock under the 2012 Stock Incentive Plan to a new member of the Company's Board of Directors. These options were issued with an exercise price of $9.05 per share and a grant date fair value of $3.64 per share, with an expected life of five years, risk-free interest rate of 2.8 percent , and expected volatility of 38.8 percent . Share-based compensation expense from time-based stock options for the three-month periods ended June 30, 2018 and 2017 , was approximately $0.1 million and $0.3 million , respectively. Share-based compensation expense from time-based stock options for the six -month periods ended June 30, 2018 and 2017 , was approximately $0.1 million and $0.4 million , respectively. As of June 30, 2018 there was no unrecognized share-based compensation expense related to the grants described above as all outstanding options were vested. As of December 31, 2017 , the unrecognized share-based compensation expense related to the grants described above was $13,000 . At June 30, 2018 , the aggregate intrinsic value of outstanding and vested stock options to purchase 1,268,000 shares of common stock was $0.3 million . At December 31, 2017 , the aggregate intrinsic value of outstanding options to purchase 1,390,000 shares of common stock, the exercisable options to purchase 1,293,000 shares of common stock, and options to purchase 92,000 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, 2018 and 2017 , the Company issued 69,000 and 9,000 shares of common stock upon the exercise of stock options at an average exercise price of $5.11 and $11.98 per share, respectively. The aggregate intrinsic values of options exercised during the six -month periods ended June 30, 2018 and 2017 , was $0.4 million and $7,000 , respectively. For the six -month periods ended June 30, 2018 and 2017 , the Company recognized $0.1 million and $0.0 million of tax benefits from the exercise of stock options, respectively. As of June 30, 2018 and December 31, 2017 , the Company did not have any unvested performance-based stock options outstanding. Restricted Stock Units The Company’s outstanding restricted stock units ("RSUs"), include time-based RSUs, which vest over differing periods of time ranging from 12 months to up to 48 months from the RSU grant date, as well as performance-based RSUs, which vest either upon achieving cumulative annual net sales growth targets over a rolling one -year period or upon achieving earnings-per-share targets over a rolling one -year period. RSUs granted to members of the Company's Board of Directors are not issued until the expiration of a two -year restriction period following vesting. There were 56,000 and 96,000 vested RSUs as of June 30, 2018 , and December 31, 2017 , respectively, that have been granted to members of the Company's Board of Directors but remain subject to the two -year restriction period. RSU activity for the six -month period ended June 30, 2018 , 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, 2017 728 $ 11.56 Granted 237 11.02 Forfeited (29 ) 11.61 Issued (182 ) 11.75 Restricted Stock Units outstanding at June 30, 2018 754 11.34 During the six -month period ended June 30, 2018 , the Company granted 237,000 RSUs under the 2012 Incentive Plan to the Company’s Board of Directors, executive officers and other employees, which were comprised of both time-based RSUs and net sales and adjusted EBITDA performance-based RSUs. The time-based RSUs were issued with a weighted-average grant date fair value of $10.93 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 adjusted EBITDA earnings-per-share performance-based RSUs were issued with a weighted-average grant date fair value of $11.20 per share and vest upon achieving targets over a three -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. For RSUs with post-vesting restrictions, a Finnerty Model was utilized to calculate a valuation discount from the market value of common shares reflecting the restriction embedded in the RSUs preventing the sale of the underlying shares over a certain period of time. The Finnerty Model proposes to estimate a discount for lack of marketability such as transfer restrictions by using an option pricing theory. The concept underpinning the Finnerty Model is that restricted stock cannot be sold over a certain period of time. Using assumptions previously determined for the application of the option pricing model at the valuation date, the Finnerty Model discount for lack of marketability is approximately 11.9 percent for a common share. Share-based compensation expense for RSUs for the three-month periods ended June 30, 2018 and 2017 , was approximately $0.5 million and $0.7 million , respectively. Share-based compensation expense from RSUs for the six -month periods ended June 30, 2018 and 2017 , was approximately $1.0 million and $1.3 million , respectively. As of June 30, 2018 , and December 31, 2017 , the unrecognized share-based compensation expense related to the grants described above, excluding incentive awards discussed below, was $1.9 million and $2.0 million , respectively. The remaining compensation expense 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 and earnings-per-share performance-based RSUs for the six -month periods ended June 30, 2018 and 2017 . Should the Company attain all of the net sales metrics related to the net sales performance-based stock option grants, the Company would recognize up to $4.0 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 40,000 shares for the six -month period ended June 30, 2018 . 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, 2018 | |
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 and 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 and customer bases, 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 NSP China), and one business segment operates under the Synergy® WorldWide brand. Net sales for each segment have been reduced by intercompany sales as they are not included in the measure of segment profit or loss reviewed by the chief executive officer. The Company evaluates performance based on contribution margin (loss) by segment before consideration of certain inter-segment transfers and expenses. In the fourth quarter of 2017, the Company moved the reporting of its wholesale business, in which the Company sells its products to a locally managed entity independent of the Company that has distribution rights for the market, from the NSP China segment to the NSP Russia, Central and Eastern Europe segment. The net sales and contribution margin for the three and six months ended June 30, 2017 were recast to reflect that change. Reportable business segment information is as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net sales: NSP Americas $ 38,386 $ 39,421 $ 80,257 $ 84,066 NSP Russia, Central and Eastern Europe 9,407 7,160 18,958 15,606 Synergy WorldWide 36,719 30,363 68,537 57,676 NSP China 6,754 4,400 10,856 7,094 Total net sales 91,266 81,344 178,608 164,442 Contribution margin (1): NSP Americas 15,189 16,495 32,524 35,690 NSP Russia, Central and Eastern Europe 3,135 2,508 6,339 5,432 Synergy WorldWide 11,755 9,410 21,263 17,609 NSP China 5,417 3,446 8,637 5,515 Total contribution margin 35,496 31,859 68,763 64,246 Selling, general and administrative expenses (2) 33,310 31,836 65,696 62,172 Operating income 2,186 23 3,067 2,074 Other income (loss), net (1,807 ) 441 (1,067 ) 1,716 Income before provision for income taxes $ 379 $ 464 $ 2,000 $ 3,790 _________________________________________ (1) Contribution margin consists of net sales less cost of sales and volume incentives expense. (2) Service fees in the NSP China segment related to sales in China, occurring after the Company's receipt of its direct selling license and pre-opening product sales through Hong Kong, totaled $2.5 million and $4.0 million for the three and six -month periods ended June 30, 2018 , respectively, compared to $1.7 million and $2.6 million for the three and six -month periods ended June 30, 2017 . These service fees are included in the Company's selling, general and administrative expenses. From an individual country perspective, the United States and South Korea comprise 10 percent or more of consolidated net sales for the three and six -month periods ended June 30, 2018 and 2017 , as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net sales: United States $ 32,913 $ 33,805 $ 68,140 $ 71,540 South Korea 19,608 12,486 34,192 23,832 Other 38,745 35,053 76,276 69,070 $ 91,266 $ 81,344 $ 178,608 $ 164,442 Net sales generated by each of the Company’s product lines is set forth below (dollar amounts in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 NSP Americas: General health $ 17,058 $ 18,181 $ 34,800 $ 38,047 Immune 3,845 3,169 9,389 8,242 Cardiovascular 2,874 2,820 5,974 6,136 Digestive 11,242 11,660 22,954 23,808 Personal care 1,510 1,487 3,335 3,373 Weight management 1,857 2,104 3,805 4,460 38,386 39,421 80,257 84,066 NSP Russia, Eastern and Central Europe: General health $ 4,120 $ 3,203 $ 8,251 $ 7,146 Immune 893 674 1,922 1,536 Cardiovascular 672 512 1,367 1,107 Digestive 2,510 2,150 4,941 4,238 Personal care 902 442 1,862 1,084 Weight management 310 179 615 495 9,407 7,160 18,958 15,606 Synergy WorldWide: General health $ 10,562 $ 7,624 $ 19,203 $ 14,311 Immune 140 117 289 238 Cardiovascular 15,383 12,603 28,713 23,706 Digestive 4,037 4,154 7,862 7,619 Personal care 2,308 1,926 4,448 3,993 Weight management 4,289 3,939 8,022 7,809 36,719 30,363 68,537 57,676 NSP China: General health $ 795 $ 824 $ 1,138 $ 1,318 Immune 10 84 156 131 Cardiovascular 1,848 940 2,409 1,457 Digestive 2,868 1,692 5,324 3,124 Personal care 1,007 27 1,260 69 Weight management 226 833 569 995 6,754 4,400 10,856 7,094 $ 91,266 $ 81,344 $ 178,608 $ 164,442 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 $ 63,721 $ 65,928 Other 2,759 3,178 Total property, plant and equipment $ 66,480 $ 69,106 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2018 and 2017 , the Company’s provision for income taxes, as a percentage of income before income taxes was 116.4 percent and 190.5 percent , respectively, compared with a U.S. federal statutory rate of 21.0 percent and 35.0 percent . For the six months ended June 30, 2018 and 2017 , the Company’s provision for income taxes, as a percentage of income before income taxes was 86.5 percent and 61.9 percent , respectively, compared with a U.S. federal statutory rate of 21.0 percent and 35.0 percent . The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and six months ended June 30, 2018 , was primarily attributed to current year foreign losses, largely related to China, that presently do not provide future tax benefit, as well as net unfavorable foreign tax related items. The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and six months ended June 30, 2017 , was primarily attributed to current year foreign losses, largely related to China, that presently do not provide future tax benefit, partially offset by foreign tax credit benefits. In December 2017, the Tax Cuts and Jobs Act (Tax Reform Act) was signed into law. The provisions of the Tax Reform Act and related guidance provided by Staff Accounting Bulletin No. 118 allow for adjustments throughout 2018 to account for the impacts of the 2017 tax law changes. As of June 30, 2018, no additional adjustments related to these items have been made; however, adjustments may be necessary in future periods due to the significant complexity of the Tax Reform Act and anticipated additional regulatory guidance or technical corrections that may be forthcoming as well as actions the Company may take as a result of tax reform. Because of the complexity of the new Global Intangible Low-taxed Income (GILTI) rules and the Foreign Derived Intangible Income (FDII) rules, the Company is continuing to evaluate these provisions of the Tax Reform Act and the application of ASC 740. The Company is also continuing to gather additional information and expect to complete its accounting within one year of enactment. The Company’s U.S. federal income tax returns for 2014 through 2016 are open to examination for federal tax purposes. The Company has several foreign tax jurisdictions that have open tax years from 2010 through 2017. As of June 30, 2018 , the Company had accrued $4.8 million related to unrecognized tax positions, compared with $4.6 million as of December 31, 2017 . This net increase was primarily attributed to transfer pricing contingencies. 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, 2018 | |
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. At June 30, 2018 and December 31, 2017 , accrued liabilities were $0.2 million and $0.4 million , respectively, 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 $3.4 million . Other Litigation The Company is a party to various other legal proceedings in the United States and several foreign jurisdictions related to value-added tax assessments and other civil litigation. As of June 30, 2018 and December 31, 2017 , accrued liabilities were $1.4 million and $1.5 million , respectively, related to the estimated outcome of these proceedings. In addition, the Company is a party to other litigation where 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 $1.9 million . |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions During the three and six months ended June 30, 2018 , NSP China borrowed $0 and $2.0 million from the Company and $0 and $0.5 million the Company's joint venture partner, respectively. These notes are payable in one year and bear interest of 3.0 percent . As of June 30, 2018 and December 31, 2017 outstanding borrowings by NSP China from the Company were $4.1 million and $2.0 million , respectively. As of June 30, 2018 and December 31, 2017 outstanding borrowings by NSP China from the Company's joint venture partner were $1.0 million and $0.5 million , respectively. The notes between NSP China and the Company eliminate in consolidation. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 (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 Investment securities - trading $ 1,545 $ — $ — $ 1,545 Total assets measured at fair value on a recurring basis $ 1,545 $ — $ — $ 1,545 The following table presents the Company’s hierarchy for its assets, measured at fair value on a recurring basis, as of December 31, 2017 (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 Investment securities - trading $ 1,980 $ — $ — $ 1,980 Total assets measured at fair value on a recurring basis $ 1,980 $ — $ — $ 1,980 Investment securities - trading — 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, 2018 , and for the year ended December 31, 2017 , there were no fair value measurements using significant other observable inputs (Level 2) or significant unobservable inputs (Level 3). The carrying amounts reflected on the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature. The carrying amount reflected on the condensed consolidated balance sheets for the revolving credit facility approximates fair value due to it being variable-rate debt. During the six months ended June 30, 2018 and 2017 , the Company did not have any re-measurements of non-financial assets at fair value on a nonrecurring basis subsequent to their initial recognition. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Adoption of ASU Topic 606 On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605. The Company recorded a net reduction to opening accumulated deficit of $0.9 million , net of tax, as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to deferred revenue on shipments that had not been delivered being recognized upon shipment and deferrals for annual membership fees that are no longer deferred. The impact to revenues and operating income as a result of applying Topic 606 was a decrease of $0.5 million and $0.2 million , respectively, for the six months ended June 30, 2018 . Revenue Recognition Net sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives or rebates based upon historical information and current trends. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. All revenue is recognized when the Company satisfies its performance obligations under the contract. The Company recognizes revenue by transferring the promised products to the customer, with revenue recognized at shipping point, the point in time the customer obtains control of the products. The majority of the Company's contracts have a single performance obligation and are short term in nature. Contracts with multiple performance obligations are insignificant. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Amounts received for unshipped merchandise are recorded as deferred revenue. A reserve for product returns is recorded based upon historical experience and current trends. The Company allows independent Managers or Distributors to return the unused portion of products within ninety days of purchase if they are not satisfied with the product. In some of the Company’s markets, the requirements to return product are more restrictive. From time to time, the Company’s U.S. operations extend short-term credit associated with product promotions. In addition, for certain of the Company’s international operations, the Company offers credit terms consistent with industry standards within the country of operation. Volume incentives, and other sales incentives or rebates are a significant part of the Company's direct sales marketing program, and represent commission payments made to independent distributors. These payments are designed to provide incentives for reaching higher sales levels. The amount of volume incentive recognized is determined based upon the amount of qualifying purchases in a given month and recorded as volume incentive expense. Payments to independent Managers and Distributors for sales incentives or rebates related to their own purchases are recorded as a reduction of revenue. Payments for sales incentives and rebates are calculated monthly based upon qualifying sales. Contract Liabilities - Customer Loyalty Programs The Company records contract liabilities for loyalty point program in deferred revenue. These programs are accounted for as a reduction in the transaction price and are generally recognized as points are redeemed for additional products. The following table presents changes in these contract liability balances for the six -month period ended June 30, 2018 (U.S. dollars in thousands): June 30, Outstanding at December 31, 2017 $ 1,126 Increase (decrease) attributed to: Customer loyalty net deferrals 2,692 Customer loyalty redemptions (2,392 ) Outstanding at June 30, 2018 $ 1,426 The table above excludes liability for sales returns, as they are insignificant. Disaggregation of Revenue The Company’s products are grouped into six principal categories: general health, immune, cardiovascular, digestive, personal care and weight management. The Company has four business segments that are divided based on the different characteristics of their distributor and customer bases, distributor compensation plans and product formulations. three business segments operate under the Nature’s Sunshine Products brand and one business segment operates under the Synergy® WorldWide brand. See Note 8, Segment Information, for further information on the Company’s reportable segments and the Company’s presentation of disaggregated revenue by reportable segment and product category. Practical Expedients and Exemptions The Company has made the accounting policy election to treat shipping and handling as a fulfillment activity rather than a promised service under Topic 606. The Company generally expenses volume incentives when incurred because the amortization period would have been one year or less. All of the Company’s contracts with customers have a duration of less than one year, the value of any unsatisfied performance obligations is insignificant. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 sells its products to a sales force of independent distributors who use the products themselves or resell them to consumers. |
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 intercompany accounts and transactions are eliminated in consolidation. The Company consolidates the joint ventures in Hong Kong and China in its consolidated financial statements, with another party's interest presented as noncontrolling interest. 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, 2018 , and for the three and six -month periods ended June 30, 2018 and 2017 . The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2018 . 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, 2017 . |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests decreased as a result of the net loss attributable to the noncontrolling interests by $0.3 million and $0.5 million during the six months ended June 30, 2018 and 2017 , respectively. As of June 30, 2018 , and December 31, 2017 , noncontrolling interests were $0.1 million and $0.4 million , respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company adopted the requirements of revenue recognition from Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (“Topic 606”) effective January 1, 2018 under the modified retrospective approach. The cumulative effect of adopting Topic 606 on January 1, 2018 was a decrease to accumulated deficit of $0.9 million (net of tax). See Note 13 - Revenue Recognition for additional disclosure of the adoption of Topic 606. In January 2016, the Financial Accounting Standards Board ("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 did not 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 shall continue to depend on its classification as a finance or operating lease. The ASU will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The adoption of this ASU will impact the classification of expenses on the statement of operations, primarily the classification between rent expense and interest expense, but is not expected to have a material impact on the Company’s net results of operations; however, it is also expected to gross-up the consolidated balance sheet as a result of recognizing a lease asset along with a similar lease liability. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of ASU 2017-09 did not have a material effect on the Company's results of operations, consolidated financial statements and footnote disclosures. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Effects from Accumulated Other Comprehensive Income. This update allows a reclassification of stranded tax effects, resulting from the Tax Cuts and Jobs Act 2017, from accumulated other comprehensive income to retained earnings. This ASU will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 $ 10,384 $ 9,522 Work in progress 1,960 2,153 Finished goods 28,937 32,372 Total inventories $ 41,281 $ 44,047 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 and 2017 (dollar and share amounts in thousands, except for per share information): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net income (loss) attributable to common shareholders $ 67 $ (187 ) $ 565 $ 1,973 Basic weighted average shares outstanding 19,105 18,876 19,058 18,861 Basic earnings (loss) per share attributable to common shareholders $ — $ (0.01 ) $ 0.03 $ 0.10 Diluted shares outstanding: Basic weighted-average shares outstanding 19,105 18,876 19,058 18,861 Stock-based awards 297 — 350 390 Diluted weighted-average shares outstanding 19,402 18,876 19,408 19,251 Diluted earnings (loss) per share attributable to common shareholders $ — $ (0.01 ) $ 0.03 $ 0.10 Dilutive shares excluded from diluted-per-share amounts: Stock options 330 — (1) 330 371 Anti-dilutive shares excluded from diluted-per-share amounts: Stock options 1,160 2,444 (1) 1,160 1,363 (1) As a result of the net loss for the three months ended June 30, 2017, no potentially dilutive securities are included in the calculation of diluted earnings (loss) per share because such effect would be anti-dilutive. Potentially dilutive securities include 1,540 outstanding options to purchase shares of common stock and 904 restricted stock units. |
Capital Transactions (Tables)
Capital Transactions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of stock option activity | Stock option activity for the six -month period ended June 30, 2018 , is as follows (amounts in thousands, except per share information): Number of Shares Weighted Average Exercise Price Per Share Options outstanding at December 31, 2017 1,390 $ 12.20 Granted 25 9.05 Forfeited or canceled (78 ) 16.31 Exercised (69 ) 5.11 Options outstanding at June 30, 2018 1,268 12.27 |
Schedule of restricted stock unit activity | RSU activity for the six -month period ended June 30, 2018 , 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, 2017 728 $ 11.56 Granted 237 11.02 Forfeited (29 ) 11.61 Issued (182 ) 11.75 Restricted Stock Units outstanding at June 30, 2018 754 11.34 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 2018 2017 2018 2017 Net sales: NSP Americas $ 38,386 $ 39,421 $ 80,257 $ 84,066 NSP Russia, Central and Eastern Europe 9,407 7,160 18,958 15,606 Synergy WorldWide 36,719 30,363 68,537 57,676 NSP China 6,754 4,400 10,856 7,094 Total net sales 91,266 81,344 178,608 164,442 Contribution margin (1): NSP Americas 15,189 16,495 32,524 35,690 NSP Russia, Central and Eastern Europe 3,135 2,508 6,339 5,432 Synergy WorldWide 11,755 9,410 21,263 17,609 NSP China 5,417 3,446 8,637 5,515 Total contribution margin 35,496 31,859 68,763 64,246 Selling, general and administrative expenses (2) 33,310 31,836 65,696 62,172 Operating income 2,186 23 3,067 2,074 Other income (loss), net (1,807 ) 441 (1,067 ) 1,716 Income before provision for income taxes $ 379 $ 464 $ 2,000 $ 3,790 _________________________________________ (1) Contribution margin consists of net sales less cost of sales and volume incentives expense. (2) Service fees in the NSP China segment related to sales in China, occurring after the Company's receipt of its direct selling license and pre-opening product sales through Hong Kong, totaled $2.5 million and $4.0 million for the three and six -month periods ended June 30, 2018 , respectively, compared to $1.7 million and $2.6 million for the three and six -month periods ended June 30, 2017 . These service fees are included in the Company's selling, general and administrative expenses. |
Schedule of consolidated net sales revenue by geographical locations | From an individual country perspective, the United States and South Korea comprise 10 percent or more of consolidated net sales for the three and six -month periods ended June 30, 2018 and 2017 , as follows (dollar amounts in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net sales: United States $ 32,913 $ 33,805 $ 68,140 $ 71,540 South Korea 19,608 12,486 34,192 23,832 Other 38,745 35,053 76,276 69,070 $ 91,266 $ 81,344 $ 178,608 $ 164,442 |
Schedule of revenue generated by each of the Company's product lines | Net sales generated by each of the Company’s product lines is set forth below (dollar amounts in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 NSP Americas: General health $ 17,058 $ 18,181 $ 34,800 $ 38,047 Immune 3,845 3,169 9,389 8,242 Cardiovascular 2,874 2,820 5,974 6,136 Digestive 11,242 11,660 22,954 23,808 Personal care 1,510 1,487 3,335 3,373 Weight management 1,857 2,104 3,805 4,460 38,386 39,421 80,257 84,066 NSP Russia, Eastern and Central Europe: General health $ 4,120 $ 3,203 $ 8,251 $ 7,146 Immune 893 674 1,922 1,536 Cardiovascular 672 512 1,367 1,107 Digestive 2,510 2,150 4,941 4,238 Personal care 902 442 1,862 1,084 Weight management 310 179 615 495 9,407 7,160 18,958 15,606 Synergy WorldWide: General health $ 10,562 $ 7,624 $ 19,203 $ 14,311 Immune 140 117 289 238 Cardiovascular 15,383 12,603 28,713 23,706 Digestive 4,037 4,154 7,862 7,619 Personal care 2,308 1,926 4,448 3,993 Weight management 4,289 3,939 8,022 7,809 36,719 30,363 68,537 57,676 NSP China: General health $ 795 $ 824 $ 1,138 $ 1,318 Immune 10 84 156 131 Cardiovascular 1,848 940 2,409 1,457 Digestive 2,868 1,692 5,324 3,124 Personal care 1,007 27 1,260 69 Weight management 226 833 569 995 6,754 4,400 10,856 7,094 $ 91,266 $ 81,344 $ 178,608 $ 164,442 |
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 $ 63,721 $ 65,928 Other 2,759 3,178 Total property, plant and equipment $ 66,480 $ 69,106 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 (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 Investment securities - trading $ 1,545 $ — $ — $ 1,545 Total assets measured at fair value on a recurring basis $ 1,545 $ — $ — $ 1,545 The following table presents the Company’s hierarchy for its assets, measured at fair value on a recurring basis, as of December 31, 2017 (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 Investment securities - trading $ 1,980 $ — $ — $ 1,980 Total assets measured at fair value on a recurring basis $ 1,980 $ — $ — $ 1,980 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table presents changes in these contract liability balances for the six -month period ended June 30, 2018 (U.S. dollars in thousands): June 30, Outstanding at December 31, 2017 $ 1,126 Increase (decrease) attributed to: Customer loyalty net deferrals 2,692 Customer loyalty redemptions (2,392 ) Outstanding at June 30, 2018 $ 1,426 The table above excludes liability for sales returns, as they are insignificant. |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Noncontrolling Interest [Line Items] | ||||
Decrease in noncontrolling interest | $ 300 | $ 500 | ||
Noncontrolling interests | $ 117 | 117 | $ 411 | |
Retained earnings (accumulated deficit) | (653) | (653) | (2,072) | |
Transition expenses | 1,500 | 1,500 | ||
Accrued transition costs | 1,400 | 1,400 | ||
Accrued Severance and Rent Costs | ||||
Noncontrolling Interest [Line Items] | ||||
Accrued severance and rent costs | $ 400 | $ 400 | 800 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Noncontrolling Interest [Line Items] | ||||
Retained earnings (accumulated deficit) | $ 900 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 10,384 | $ 9,522 |
Work in progress | 1,960 | 2,153 |
Finished goods | 28,937 | 32,372 |
Total inventories | $ 41,281 | $ 44,047 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)aft² | Jun. 30, 2018USD ($)aft² | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)aft² | Jun. 30, 2017USD ($) | Dec. 31, 2017a | |
Property, Plant and Equipment [Line Items] | ||||||
Impairment of long-lived assets held-for-use | $ 0 | $ 0 | $ 0 | $ 0 | ||
Proceeds from sale of property, plant and equipment | 2,558,000 | 522,000 | ||||
Gain on sale of property | $ 2,267,000 | $ 10,000 | ||||
Mexico City, Mexico | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of square feet | ft² | 29,300 | 29,300 | 29,300 | |||
Proceeds from sale of property, plant and equipment | $ 2,600,000 | |||||
Gain on sale of property | $ 2,300,000 | $ 2,300,000 | ||||
Held-for-sale | Provo, Utah | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of acres | a | 8 | 8 | 8 | 8 |
Investment Securities - Tradi31
Investment Securities - Trading (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Trading securities portfolio | $ 1,545 | $ 1,545 | $ 1,980 | ||
Debt securities, trading, realized gain | $ 34 | $ 51 | $ 34 | $ 102 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - Revolving credit facility - Bank of America Credit Agreement - USD ($) | Jul. 11, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Long-term debt | |||
Maximum borrowing capacity | $ 25,000,000 | ||
Annual commitment fee | 0.20% | ||
Long-term line of credit | $ 7,200,000 | ||
LIBOR | |||
Long-term debt | |||
Margin on variable rate | 1.25% | ||
Effective interest rate | 3.34% | 2.82% |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income (loss) attributable to common shareholders | $ 67 | $ (187) | $ 565 | $ 1,973 |
Basic weighted-average shares outstanding (in shares) | 19,105,000 | 18,876,000 | 19,058,000 | 18,861,000 |
Basic earnings (loss) per share attributable to common shareholders (in dollars per share) | $ 0 | $ (0.01) | $ 0.03 | $ 0.10 |
Diluted shares outstanding: | ||||
Basic weighted-average shares outstanding (in shares) | 19,105,000 | 18,876,000 | 19,058,000 | 18,861,000 |
Stock-based awards (in shares) | 297,000 | 0 | 350,000 | 390,000 |
Diluted weighted-average shares outstanding (in shares) | 19,402,000 | 18,876,000 | 19,408,000 | 19,251,000 |
Diluted earnings (loss) per share attributable to common shareholders (in dollars per share) | $ 0 | $ (0.01) | $ 0.03 | $ 0.10 |
Dilutive shares excluded from diluted-per-share amounts: | ||||
Stock options (in shares) | 330,000 | 0 | 330,000 | 371,000 |
Anti-dilutive shares excluded from diluted-per-share amounts: | ||||
Stock options (in shares) | 1,160,000 | 2,444,000 | 1,160,000 | 1,363,000 |
Stock options | ||||
Anti-dilutive shares excluded from diluted-per-share amounts: | ||||
Stock options (in shares) | 1,540,000 | |||
RSUs | ||||
Anti-dilutive shares excluded from diluted-per-share amounts: | ||||
Stock options (in shares) | 904,000 |
Capital Transactions - Narrativ
Capital Transactions - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2012 | |
2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized under the plan (in shares) | 1,500,000 | ||||||
Additional number of shares authorized under the plan (in shares) | 1,500,000 | ||||||
Maximum | 2009 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized under the plan (in shares) | 400,000 | 400,000 | |||||
Time-based stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 100,000 | $ 300,000 | $ 100,000 | $ 400,000 | |||
Unrecognized share-based compensation expense | $ 0 | $ 0 | $ 13,000 | ||||
Time-based stock options | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 25,000 | ||||||
Exercised (in dollars per share) | $ 9.05 | ||||||
Weighted-average grant date fair value (in dollars per share) | $ 3.64 | ||||||
Expected contractual life (in years) | 5 years | ||||||
Risk-free interest rate (as a percent) | 2.80% | ||||||
Expected volatility (as a percent) | 38.80% | ||||||
Time-based stock options | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 48 months | ||||||
Performance based stock options operating income margins | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
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% | ||||||
Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 25,000 | ||||||
Exercised (in dollars per share) | $ 5.11 | $ 11.98 | |||||
Expected to vest (in shares) | 92,000 | ||||||
Options outstanding (in shares) | 1,268,000 | 1,268,000 | 1,390,000 | ||||
Exercisable (in shares) | 1,293,000 | ||||||
Aggregate intrinsic value, outstanding | $ 300,000 | $ 300,000 | $ 900,000 | ||||
Aggregate intrinsic value, exercisable | 900,000 | ||||||
Aggregate intrinsic value, expected to vest | 0 | ||||||
Exercised (in shares) | 69,000 | 9,000 | |||||
Aggregate intrinsic values of options exercised | $ 400,000 | $ 7,000 | |||||
Tax benefit from the exercise of stock options | 100,000 | 0 | |||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | 500,000 | $ 700,000 | 1,000,000 | 1,300,000 | |||
Unrecognized share-based compensation expense | $ 1,900,000 | $ 1,900,000 | $ 2,000,000 | ||||
Discount for lack of marketability | 11.90% | ||||||
Weighted-average period over which the remaining compensation cost is expected to be recognized | 1 year 3 months | ||||||
Minimum withholding requirements (in shares) | 40,000 | ||||||
RSUs | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 237,000 | ||||||
RSUs | Maximum | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 48 months | ||||||
RSUs | Minimum | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 12 months | ||||||
RSUs | Director | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restriction period for issuance of shares | 2 years | ||||||
Nonvested subject to restriction period (in shares) | 56,000 | 56,000 | 96,000 | ||||
Performance-Based Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 0 | $ 0 | |||||
Performance-Based Restricted Stock Units (RSUs) | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Weighted-average grant date fair value (in dollars per share) | $ 11.20 | ||||||
Performance-Based Restricted Stock Units (RSUs) | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation potential compensation expense to be recognized | $ 4,000,000 | $ 4,000,000 | |||||
Performance-Based Restricted Stock Units (RSUs) | Net Sales and Operating Income Targets | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Time-Based Restricted Stock Units (RSUs) | 2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Weighted-average grant date fair value (in dollars per share) | $ 10.93 |
Capital Transactions - Stock Op
Capital Transactions - Stock Option Activity (Details) - Stock options - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Number of Shares | ||
Options outstanding at the beginning of the period (in shares) | 1,390,000 | |
Granted (in shares) | 25,000 | |
Forfeited or canceled (in shares) | (78,000) | |
Exercised (in shares) | (69,000) | (9,000) |
Options outstanding at the end of the period (in shares) | 1,268,000 | |
Weighted Average Exercise Price Per Share | ||
Options outstanding at the beginning of the period (in dollars per share) | $ 12.20 | |
Granted (in dollars per share) | 9.05 | |
Forfeited or canceled (in dollars per share) | 16.31 | |
Exercised (in dollars per share) | 5.11 | $ 11.98 |
Options outstanding at the end of the period (in dollars per share) | $ 12.27 |
Capital Transactions - RSU Acti
Capital Transactions - RSU Activity (Details) - 2012 Stock Incentive Plan - RSUs | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Shares | |
Restricted Stock Units outstanding, beginning balance (in shares) | shares | 728,000 |
Granted (in shares) | shares | 237,000 |
Issued (in shares) | shares | (29,000) |
Forfeited (in shares) | shares | (182,000) |
Restricted Stock Units outstanding, ending balance (in shares) | shares | 754,000 |
Weighted Average Grant Date Fair Value | |
Restricted Stock Units outstanding, beginning balance (in dollars per share) | $ / shares | $ 11.56 |
Granted (in dollars per share) | $ / shares | 11.02 |
Issued (in dollars per share) | $ / shares | 11.61 |
Forfeited (in dollars per share) | $ / shares | 11.75 |
Restricted Stock Units outstanding, ending balance (in dollars per share) | $ / shares | $ 11.34 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment information | |||||
Number of business segments | segment | 4 | ||||
Net sales: | |||||
Total net sales revenue | $ 91,266 | $ 81,344 | $ 178,608 | $ 164,442 | |
Contribution margin: | |||||
Total contribution margin | 35,496 | 31,859 | 68,763 | 64,246 | |
Selling, general and administrative | 33,310 | 31,836 | 65,696 | 62,172 | |
Operating income | 2,186 | 23 | 3,067 | 2,074 | |
Other income (loss), net | (1,807) | 441 | (1,067) | 1,716 | |
Income before provision for income taxes | 379 | 464 | 2,000 | 3,790 | |
Property, plant and equipment: | |||||
Total property, plant and equipment | 66,480 | 66,480 | $ 69,106 | ||
United States | |||||
Net sales: | |||||
Total net sales revenue | 32,913 | 33,805 | 68,140 | 71,540 | |
Property, plant and equipment: | |||||
Total property, plant and equipment | 63,721 | 63,721 | 65,928 | ||
South Korea | |||||
Net sales: | |||||
Total net sales revenue | 19,608 | 12,486 | 34,192 | 23,832 | |
Other Countries | |||||
Net sales: | |||||
Total net sales revenue | 38,745 | 35,053 | 76,276 | 69,070 | |
Other | |||||
Property, plant and equipment: | |||||
Total property, plant and equipment | 2,759 | $ 2,759 | $ 3,178 | ||
NSP Americas; NSP Russia, Central and Eastern Europe; and NSP China | |||||
Segment information | |||||
Number of operating segments | segment | 3 | ||||
NSP Americas | |||||
Net sales: | |||||
Total net sales revenue | 38,386 | 39,421 | $ 80,257 | 84,066 | |
Contribution margin: | |||||
Total contribution margin | 15,189 | 16,495 | 32,524 | 35,690 | |
NSP Americas | General health | |||||
Net sales: | |||||
Total net sales revenue | 17,058 | 18,181 | 34,800 | 38,047 | |
NSP Americas | Immune | |||||
Net sales: | |||||
Total net sales revenue | 3,845 | 3,169 | 9,389 | 8,242 | |
NSP Americas | Cardiovascular | |||||
Net sales: | |||||
Total net sales revenue | 2,874 | 2,820 | 5,974 | 6,136 | |
NSP Americas | Digestive | |||||
Net sales: | |||||
Total net sales revenue | 11,242 | 11,660 | 22,954 | 23,808 | |
NSP Americas | Personal care | |||||
Net sales: | |||||
Total net sales revenue | 1,510 | 1,487 | 3,335 | 3,373 | |
NSP Americas | Weight management | |||||
Net sales: | |||||
Total net sales revenue | 1,857 | 2,104 | 3,805 | 4,460 | |
NSP Russia, Central and Eastern Europe | |||||
Net sales: | |||||
Total net sales revenue | 9,407 | 7,160 | 18,958 | 15,606 | |
Contribution margin: | |||||
Total contribution margin | 3,135 | 2,508 | 6,339 | 5,432 | |
NSP Russia, Central and Eastern Europe | General health | |||||
Net sales: | |||||
Total net sales revenue | 4,120 | 3,203 | 8,251 | 7,146 | |
NSP Russia, Central and Eastern Europe | Immune | |||||
Net sales: | |||||
Total net sales revenue | 893 | 674 | 1,922 | 1,536 | |
NSP Russia, Central and Eastern Europe | Cardiovascular | |||||
Net sales: | |||||
Total net sales revenue | 672 | 512 | 1,367 | 1,107 | |
NSP Russia, Central and Eastern Europe | Digestive | |||||
Net sales: | |||||
Total net sales revenue | 2,510 | 2,150 | 4,941 | 4,238 | |
NSP Russia, Central and Eastern Europe | Personal care | |||||
Net sales: | |||||
Total net sales revenue | 902 | 442 | 1,862 | 1,084 | |
NSP Russia, Central and Eastern Europe | Weight management | |||||
Net sales: | |||||
Total net sales revenue | 310 | 179 | $ 615 | 495 | |
Synergy WorldWide | |||||
Segment information | |||||
Number of operating segments | segment | 1 | ||||
Net sales: | |||||
Total net sales revenue | 36,719 | 30,363 | $ 68,537 | 57,676 | |
Contribution margin: | |||||
Total contribution margin | 11,755 | 9,410 | 21,263 | 17,609 | |
Synergy WorldWide | General health | |||||
Net sales: | |||||
Total net sales revenue | 10,562 | 7,624 | 19,203 | 14,311 | |
Synergy WorldWide | Immune | |||||
Net sales: | |||||
Total net sales revenue | 140 | 117 | 289 | 238 | |
Synergy WorldWide | Cardiovascular | |||||
Net sales: | |||||
Total net sales revenue | 15,383 | 12,603 | 28,713 | 23,706 | |
Synergy WorldWide | Digestive | |||||
Net sales: | |||||
Total net sales revenue | 4,037 | 4,154 | 7,862 | 7,619 | |
Synergy WorldWide | Personal care | |||||
Net sales: | |||||
Total net sales revenue | 2,308 | 1,926 | 4,448 | 3,993 | |
Synergy WorldWide | Weight management | |||||
Net sales: | |||||
Total net sales revenue | 4,289 | 3,939 | 8,022 | 7,809 | |
NSP China | |||||
Net sales: | |||||
Total net sales revenue | 6,754 | 4,400 | 10,856 | 7,094 | |
Contribution margin: | |||||
Total contribution margin | 5,417 | 3,446 | 8,637 | 5,515 | |
NSP China | General health | |||||
Net sales: | |||||
Total net sales revenue | 795 | 824 | 1,138 | 1,318 | |
NSP China | Immune | |||||
Net sales: | |||||
Total net sales revenue | 10 | 84 | 156 | 131 | |
NSP China | Cardiovascular | |||||
Net sales: | |||||
Total net sales revenue | 1,848 | 940 | 2,409 | 1,457 | |
NSP China | Digestive | |||||
Net sales: | |||||
Total net sales revenue | 2,868 | 1,692 | 5,324 | 3,124 | |
NSP China | Personal care | |||||
Net sales: | |||||
Total net sales revenue | 1,007 | 27 | 1,260 | 69 | |
NSP China | Weight management | |||||
Net sales: | |||||
Total net sales revenue | 226 | 833 | 569 | 995 | |
NSP China | Hong Kong | |||||
Contribution margin: | |||||
Selling, general and administrative | $ 2,500 | $ 1,700 | $ 4,000 | $ 2,600 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Provision (benefit) for income taxes, as a percentage of income before income taxes | 116.40% | 190.50% | 86.50% | 61.90% | |
Liability related to unrecognized tax benefits | $ 4.8 | $ 4.8 | $ 4.6 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 6 Months Ended | |
Jun. 30, 2018USD ($)claim | Dec. 31, 2017USD ($) | |
Non-Income Tax Contingencies | ||
Commitments and contingencies | ||
Accrued liabilities | $ 200,000 | $ 400,000 |
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 | |
Minimum | Non-Income Tax Contingencies | ||
Commitments and contingencies | ||
Estimate of possible loss | 0 | |
Minimum | Value-added tax assessments and other civil litigation | ||
Commitments and contingencies | ||
Estimate of possible loss | 0 | |
Maximum | Non-Income Tax Contingencies | ||
Commitments and contingencies | ||
Estimate of possible loss | 3,400,000 | |
Maximum | Value-added tax assessments and other civil litigation | ||
Commitments and contingencies | ||
Estimate of possible loss | 1,900,000 | |
Pending Litigation | ||
Commitments and contingencies | ||
Accrued liabilities | $ 1,400,000 | $ 1,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - NSP China - Subsidiaries - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Notes receivable, related parties, current | $ 4,100,000 | $ 4,100,000 | $ 2,000,000 |
Company's Joint Venture Partner | |||
Related Party Transaction [Line Items] | |||
Notes receivable, related parties, current | 1,000,000 | 1,000,000 | $ 500,000 |
Notes Receivable | |||
Related Party Transaction [Line Items] | |||
Related party transaction, amount | 0 | $ 2,000,000 | |
Related party transaction, rate | 3.00% | ||
Notes Receivable | Company's Joint Venture Partner | |||
Related Party Transaction [Line Items] | |||
Related party transaction, amount | $ 0 | $ 500,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Total | ||
Fair value | ||
Investment securities - trading | $ 1,545 | $ 1,980 |
Total assets measured at fair value on a recurring basis | 1,545 | 1,980 |
Level 1 - Quoted Prices in Active Markets for Identical Assets | ||
Fair value | ||
Investment securities - trading | 1,545 | 1,980 |
Total assets measured at fair value on a recurring basis | 1,545 | 1,980 |
Level 2 - Significant Other Observable Inputs | ||
Fair value | ||
Investment securities - trading | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
Level 3 - Significant Unobservable Inputs | ||
Fair value | ||
Investment securities - trading | 0 | 0 |
Total assets measured at fair value on a recurring basis | $ 0 | $ 0 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segmentproduct_category | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Retained earnings (accumulated deficit) | $ (653) | $ (653) | $ (2,072) | ||
Decrease in revenue | (91,266) | $ (81,344) | (178,608) | $ (164,442) | |
Decrease in operating income | (2,186) | (23) | $ (3,067) | (2,074) | |
Refund period | 90 days | ||||
Number of principal categories of products | product_category | 6 | ||||
Number of business segments | segment | 4 | ||||
NSP Americas; NSP Russia, Central and Eastern Europe; and NSP China | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Number of operating segments | segment | 3 | ||||
Synergy WorldWide | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Decrease in revenue | $ (36,719) | $ (30,363) | $ (68,537) | $ (57,676) | |
Number of operating segments | segment | 1 | ||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Retained earnings (accumulated deficit) | $ 900 | ||||
Decrease in revenue | $ 500 | ||||
Decrease in operating income | $ 200 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Contract Liabilities (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Outstanding at December 31, 2017 | $ 1,126 |
Increase (decrease) attributed to: | |
Customer loyalty net deferrals | 2,692 |
Customer loyalty redemptions | (2,392) |
Outstanding at June 30, 2018 | $ 1,426 |