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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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59-2705336
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer ¨
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Accelerated filer þ
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Non-accelerated filer ¨
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Smaller reporting company þ
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Emerging growth company ¨
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Page
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Product Category
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Description
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Products
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Wellness
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Products formulated and designed to meet specific wellness goals of our customers. Includes targeted nutrition for joint health, antioxidant support, digestive health, heart health, vision health, immune support and cellular health.
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Liquid, encapsulated, tableted and powder dietary and nutritional supplements, vitamins, minerals
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Premium Noni Juice, Triotein®, Cluster X2®, Children’s Chewable MultiVitamin, ReStor Silver®, ReStor Vital®, HerBalance®, Trifusion Max™, Glucosamine 2200, FibeRich®, Energin, Enhanced Essential Probiotics®, Omega 3 Essential Fatty Acids, Memory Burst®, StemRenu®, OcuFocus, FE Enzyme Toothpaste, RespFactor®, CurcuMore®, AdaptoGin®
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Herbal
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Products formulated incorporating ingredients commonly found in traditional Chinese medicine.
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Herbal supplements
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LivaPro®, Cordyceps Mycelia CS-4, Purus, CogniMax®
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Beauty
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Products to help improve skin health and bring an appearance of youthful vibrancy. This product line includes anti-aging and hydrating cleansers, creams, lotions, serums and toners to moisturize, protect and improve the appearance of skin.
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Facial skin care and hand and body care
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Skindulgence® 30-Minute Non-Surgical Facelift System, Time Restore Eye Cream and Essence, BioCell SC Mask, 24K Renaissance Rejuvenation Serum, Valesce®, Floraeda Hydrating Series, NHT Homme®, Botanical Hand Protector, Airelle® Exfoliating Cleanser, Airelle® Age-Defying Facial Serum, Airelle® Intense Hydrating Repair Complex, Airelle® Age-Defying Eye & Lip Treatment, Airelle® Hydrating Manuka Mask
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Lifestyle
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Products uniquely formulated to improve overall quality of life and to support active, physical and healthy lifestyles including weight management, intimacy support and energy enhancing supplements.
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Supplements and topical gels for improved vitality
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Alura® Lux by NHT Global, Valura Lux™, LaVie™ Vibrant Energy drink, Twin Slim Diet Jelly®, NaturalGlo™
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Home
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Products designed to create a clean and natural living environment for the home.
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Home and car appliances
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PurAir Air Purifier, AquaPur Water Purifier
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Baby
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Products uniquely formulated with gentle ingredients from nature for infants and babies.
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Infant and toddler bath and body care
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Moisturizing Lotion and Foaming Cleanser
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Active
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Products uniquely formulated to support those with active, healthy lifestyles. Products include dietary supplements to enhance daily nutrition for lasting energy and offer pre- and post- workout support.
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Dietary supplement drink mixes for nutritional support, mental and physical performance enhancement and refuel and recovery support
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Phyto Daily Active, Charge NOX, Optimal Recovery
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•
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Our field leaders are experienced and culturally coherent. They work effectively with our management, implementing our strategies and providing continuous feedback to improve our services.
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•
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A discipline and capability has been established to continue launching high-quality consumer products that are designed to facilitate the accomplishment of our corporate objectives.
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•
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We have developed and rolled out a comprehensive training system that provides a complete career path appropriate for our members. Our training material covers the needs of our members, be they prospects, new recruits, product evangelists, sales leaders or dream builders.
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•
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We have developed a year-round, multi-faceted promotional plan that targets different segments of our membership and has proven effective in the last few years.
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•
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We have implemented a commission structure that makes it as easy as possible to join our business, while giving existing members a chance to start earning money as quickly as possible in multiple ways.
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•
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The continuously improving mentality and methodology in our customer services have not only distinguished us as an organization, but have also given us a constant flow of information as to how we can do better to service our members.
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•
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Through commissions paid on the accumulated bonus volume from product purchases made by their down-line members and customers; and
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•
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Through retail profits on sales of products purchased by members at discount and wholesale prices and resold at retail prices (for purchasers in some of our smaller markets and purchasers from our China subsidiary, sales are for personal consumption only and income may not be earned through retail profits).
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•
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Teleconferences – we hold teleconferences with associate field leadership on various subjects such as technical product discussions, member organization building and management techniques.
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•
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Internet – we maintain a website at www.nhtglobal.com. On this website, the user can read company news, learn more about various products, sign up to be a member, place orders, and track the fulfillment and delivery of their orders.
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•
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Product Tools – we offer a variety of marketing tools to members, including product catalogs, videos, informational brochures, pamphlets and posters for individual products, which are both printed and available online.
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•
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Broadcast E-mail and Text Messages – we send announcements via e-mail and/or text messages to members who opt in to receive this form of communication.
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•
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Social Media Tools – in some countries we maintain country-specific social media sites to foster a community environment around our product offering and business opportunity.
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•
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impose cancellation/product return, inventory buy-backs and cooling-off rights for consumers and members;
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•
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require us or our members to obtain a license from, or register with, governmental agencies;
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•
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impose reporting requirements; and
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•
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impose upon us requirements, such as requiring members to maintain levels of retail sales to qualify to receive commissions, to ensure that members are being compensated for sales of products and not for recruiting new members.
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•
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adverse publicity or negative perceptions regarding us, our products, our method of distribution or our competitors;
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•
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lack of interest in, or the technical failure of, existing or new products;
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•
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lack of interest in our existing compensation plan for members or in enhancements or other changes to that compensation plan;
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•
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our actions to enforce our policies and procedures;
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•
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regulatory actions or charges or private actions against us or others in our industry;
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•
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general economic and business conditions;
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•
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changes in management or the loss of one or more key member leaders;
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•
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entry of new competitors, or new products or compensation plan enhancements by existing competitors, in our markets; and
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•
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potential saturation or maturity levels in a given country or market which could negatively impact our ability to attract and retain members in such market.
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•
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active participation of speculative traders in our stock (including short sellers);
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•
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market rumors regarding our business operations;
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•
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government scrutiny of our business;
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•
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adverse publicity related to our business or industry; and
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•
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fluctuations in our operating results.
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•
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through commissions paid on the accumulated bonus volume from product purchases made by their down-line members and customers; and
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•
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through retail profits on sales of products purchased by members at wholesale prices and resold at retail prices (for purchasers in some of our smaller markets and purchasers from our China subsidiary, sales are for personal consumption only and income may not be earned through retail profits).
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Year Ended December 31,
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2018
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2017
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Net sales
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100.0
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%
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100.0
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%
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Cost of sales
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20.5
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19.6
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Gross profit
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79.5
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80.4
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Operating expenses:
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Commissions expense
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45.6
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42.3
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Selling, general and administrative expenses
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16.3
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16.3
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Total operating expenses
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61.9
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58.6
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Income from operations
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17.6
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21.8
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Other income, net
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0.4
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0.2
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Income before income taxes
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18.0
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22.0
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Income tax provision
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1.8
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10.0
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Net income
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16.2
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%
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12.0
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%
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Year Ended December 31,
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||||||||||||
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2018
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2017
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Americas1
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$
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6,982
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3.6
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%
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$
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5,794
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2.9
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%
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Hong Kong2
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169,452
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88.3
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174,926
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88.5
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China
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7,744
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4.0
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7,282
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3.7
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Taiwan
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3,964
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2.1
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5,591
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2.8
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South Korea
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493
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0.3
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466
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0.2
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Japan
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204
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0.1
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129
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0.1
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Singapore
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169
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0.1
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184
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0.1
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Malaysia
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390
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0.2
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—
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—
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Russia and Kazakhstan
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868
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0.4
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913
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0.5
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Europe
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1,644
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0.9
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2,278
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1.2
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Total
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$
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191,910
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|
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100.0
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%
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$
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197,563
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|
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100.0
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%
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Declaration Date
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Per Share
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Amount
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Record Date
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Payment Date
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||||
October 21, 2018 (special)
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$
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0.18
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$
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2,048
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November 13, 2018
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November 23, 2018
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October 21, 2018
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0.16
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1,820
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November 13, 2018
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November 23, 2018
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July 18, 2018 (special)
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0.25
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2,844
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August 14, 2018
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August 24, 2018
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July 18, 2018
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0.15
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1,707
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August 14, 2018
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August 24, 2018
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April 17, 2018 (special)
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1.76
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20,022
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May 15, 2018
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May 25, 2018
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April 17, 2018
|
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0.14
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|
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1,592
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May 15, 2018
|
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May 25, 2018
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February 6, 2018
|
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0.13
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|
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1,479
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February 27, 2018
|
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March 9, 2018
|
||
Total
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|
$
|
2.77
|
|
|
$
|
31,512
|
|
|
|
|
|
|
2018
|
|
2017
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||||||||||||||||||||||||||||
|
4th
Quarter
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3rd
Quarter
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|
2nd
Quarter
|
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1st
Quarter
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|
4th
Quarter1 |
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3rd
Quarter |
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2nd
Quarter |
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1st
Quarter |
||||||||||||||||
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||||||||||||||||
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(In Thousands, Except Per Share Data)
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||||||||||||||||||||||||||||||
Net sales
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$
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41,590
|
|
|
$
|
47,043
|
|
|
$
|
50,910
|
|
|
$
|
52,367
|
|
|
$
|
46,092
|
|
|
$
|
40,132
|
|
|
$
|
51,465
|
|
|
$
|
59,874
|
|
Gross profit
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32,769
|
|
|
37,117
|
|
|
40,511
|
|
|
42,146
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|
|
36,668
|
|
|
31,949
|
|
|
41,672
|
|
|
48,629
|
|
||||||||
Income from operations
|
5,733
|
|
|
7,847
|
|
|
10,108
|
|
|
10,044
|
|
|
8,686
|
|
|
8,514
|
|
|
12,867
|
|
|
12,992
|
|
||||||||
Net income (loss)
|
5,559
|
|
|
7,629
|
|
|
9,023
|
|
|
8,824
|
|
|
(4,488
|
)
|
|
7,338
|
|
|
10,303
|
|
|
10,425
|
|
||||||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
0.49
|
|
|
0.67
|
|
|
0.80
|
|
|
0.78
|
|
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(0.40
|
)
|
|
0.65
|
|
|
0.92
|
|
|
0.93
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|
||||||||
Diluted
|
0.49
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|
|
0.67
|
|
|
0.80
|
|
|
0.78
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|
|
(0.40
|
)
|
|
0.65
|
|
|
0.91
|
|
|
0.93
|
|
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
Thereafter
|
||||||||||
Operating leases
|
|
$
|
4,455
|
|
|
$
|
1,796
|
|
|
$
|
1,792
|
|
|
$
|
540
|
|
|
$
|
327
|
|
Purchase obligations
|
|
280
|
|
|
280
|
|
|
—
|
|
|
—
|
|
|
—
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|
|||||
Long-term incentive compensation
|
|
9,034
|
|
|
1,226
|
|
|
3,093
|
|
|
4,715
|
|
|
—
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|
|||||
Tax Cut & Jobs Act repatriation tax liability
|
|
18,600
|
|
|
1,617
|
|
|
3,235
|
|
|
4,650
|
|
|
9,098
|
|
|||||
Other commitments
|
|
157
|
|
|
70
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
32,526
|
|
|
$
|
4,989
|
|
|
$
|
8,207
|
|
|
$
|
9,905
|
|
|
$
|
9,425
|
|
|
Page
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December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
132,653
|
|
|
$
|
135,311
|
|
Inventories
|
12,165
|
|
|
8,398
|
|
||
Other current assets
|
5,369
|
|
|
7,534
|
|
||
Total current assets
|
150,187
|
|
|
151,243
|
|
||
Property and equipment, net
|
934
|
|
|
1,149
|
|
||
Goodwill
|
1,764
|
|
|
1,764
|
|
||
Restricted cash
|
2,998
|
|
|
3,167
|
|
||
Deferred tax asset
|
1,207
|
|
|
1,435
|
|
||
Other assets
|
831
|
|
|
796
|
|
||
Total assets
|
$
|
157,921
|
|
|
$
|
159,554
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,631
|
|
|
$
|
1,751
|
|
Income taxes payable
|
287
|
|
|
309
|
|
||
Accrued commissions
|
12,502
|
|
|
11,170
|
|
||
Other accrued expenses
|
6,121
|
|
|
7,605
|
|
||
Deferred revenue
|
6,795
|
|
|
4,455
|
|
||
Amounts held in eWallets
|
14,611
|
|
|
15,152
|
|
||
Other current liabilities
|
1,137
|
|
|
1,479
|
|
||
Total current liabilities
|
43,084
|
|
|
41,921
|
|
||
Income taxes payable
|
16,982
|
|
|
19,052
|
|
||
Deferred tax liability
|
186
|
|
|
56
|
|
||
Long-term incentive
|
7,808
|
|
|
7,904
|
|
||
Total liabilities
|
68,060
|
|
|
68,933
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2018 and 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 50,000,000 shares authorized; 12,979,414 shares issued at December 31, 2018 and 2017
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
86,415
|
|
|
86,683
|
|
||
Retained earnings
|
44,431
|
|
|
44,908
|
|
||
Accumulated other comprehensive loss
|
(1,250
|
)
|
|
(413
|
)
|
||
Treasury stock, at cost; 1,603,322 and 1,637,524 shares at December 31, 2018 and 2017, respectively
|
(39,748
|
)
|
|
(40,570
|
)
|
||
Total stockholders’ equity
|
89,861
|
|
|
90,621
|
|
||
Total liabilities and stockholders’ equity
|
$
|
157,921
|
|
|
$
|
159,554
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Net sales
|
$
|
191,910
|
|
|
$
|
197,563
|
|
Cost of sales
|
39,367
|
|
|
38,645
|
|
||
Gross profit
|
152,543
|
|
|
158,918
|
|
||
Operating expenses:
|
|
|
|
||||
Commissions expense
|
87,502
|
|
|
83,638
|
|
||
Selling, general and administrative expenses
|
31,309
|
|
|
32,221
|
|
||
Total operating expenses
|
118,811
|
|
|
115,859
|
|
||
Income from operations
|
33,732
|
|
|
43,059
|
|
||
Other income, net
|
789
|
|
|
367
|
|
||
Income before income taxes
|
34,521
|
|
|
43,426
|
|
||
Income tax provision
|
3,486
|
|
|
19,848
|
|
||
Net income
|
$
|
31,035
|
|
|
$
|
23,578
|
|
Net income per common share:
|
|
|
|
||||
Basic
|
$
|
2.75
|
|
|
$
|
2.10
|
|
Diluted
|
$
|
2.74
|
|
|
$
|
2.09
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
||||
Basic
|
11,304
|
|
|
11,251
|
|
||
Diluted
|
11,318
|
|
|
11,267
|
|
||
Cash dividends declared per common share
|
$
|
2.77
|
|
|
$
|
1.52
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
31,035
|
|
|
$
|
23,578
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
(831
|
)
|
|
677
|
|
||
Release of cumulative translation adjustment
|
—
|
|
|
(258
|
)
|
||
Net change in foreign currency translation adjustment
|
(831
|
)
|
|
419
|
|
||
Unrealized losses on available-for-sale securities
|
(6
|
)
|
|
(25
|
)
|
||
Comprehensive income
|
$
|
30,198
|
|
|
$
|
23,972
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Treasury Stock
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||||||||
BALANCE, December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,574
|
|
|
$
|
38,548
|
|
|
$
|
(807
|
)
|
|
(1,692,218
|
)
|
|
$
|
(41,889
|
)
|
|
$
|
82,439
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,578
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,578
|
|
|||||||
Restricted stock forfeiture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(1,566
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|||||||
Common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
56,260
|
|
|
1,352
|
|
|
1,431
|
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,218
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,218
|
)
|
|||||||
Elimination of CTA upon dissolution
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(258
|
)
|
|
—
|
|
|
—
|
|
|
(258
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
677
|
|
|
—
|
|
|
—
|
|
|
677
|
|
|||||||
Unrealized losses on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||||
BALANCE, December 31, 2017
|
—
|
|
|
—
|
|
|
12,979,414
|
|
|
13
|
|
|
86,683
|
|
|
44,908
|
|
|
(413
|
)
|
|
(1,637,524
|
)
|
|
(40,570
|
)
|
|
90,621
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,035
|
|
|||||||
Common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
34,202
|
|
|
822
|
|
|
554
|
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,512
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,512
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(831
|
)
|
|
—
|
|
|
—
|
|
|
(831
|
)
|
|||||||
Unrealized losses on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
BALANCE, December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
12,979,414
|
|
|
$
|
13
|
|
|
$
|
86,415
|
|
|
$
|
44,431
|
|
|
$
|
(1,250
|
)
|
|
(1,603,322
|
)
|
|
$
|
(39,748
|
)
|
|
$
|
89,861
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
31,035
|
|
|
$
|
23,578
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
424
|
|
|
536
|
|
||
Stock-based compensation
|
—
|
|
|
35
|
|
||
Cumulative translation adjustment realized in net income
|
—
|
|
|
(258
|
)
|
||
Deferred income taxes
|
358
|
|
|
(1,644
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Inventories
|
(3,879
|
)
|
|
2,843
|
|
||
Other current assets
|
2,065
|
|
|
(3,399
|
)
|
||
Other assets
|
(55
|
)
|
|
(61
|
)
|
||
Accounts payable
|
(116
|
)
|
|
(392
|
)
|
||
Income taxes payable
|
(2,077
|
)
|
|
18,676
|
|
||
Accrued commissions
|
1,410
|
|
|
(2,417
|
)
|
||
Other accrued expenses
|
(883
|
)
|
|
(6,033
|
)
|
||
Deferred revenue
|
2,359
|
|
|
(481
|
)
|
||
Amounts held in eWallets
|
(509
|
)
|
|
(3,875
|
)
|
||
Other current liabilities
|
(326
|
)
|
|
(179
|
)
|
||
Long-term incentive
|
(96
|
)
|
|
(324
|
)
|
||
Net cash provided by operating activities
|
29,710
|
|
|
26,605
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(214
|
)
|
|
(278
|
)
|
||
Net cash used in investing activities
|
(214
|
)
|
|
(278
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Dividends paid
|
(31,512
|
)
|
|
(17,218
|
)
|
||
Net cash used in financing activities
|
(31,512
|
)
|
|
(17,218
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
(811
|
)
|
|
485
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(2,827
|
)
|
|
9,594
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period
|
138,478
|
|
|
128,884
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period
|
$
|
135,651
|
|
|
$
|
138,478
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW DISCLOSURE:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
3,130
|
|
|
$
|
6,772
|
|
Issuance of treasury stock for employee awards, net
|
$
|
554
|
|
|
$
|
1,393
|
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
Basic net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income available to common stockholders
|
$
|
31,035
|
|
|
11,304
|
|
|
$
|
2.75
|
|
|
$
|
23,578
|
|
|
11,251
|
|
|
$
|
2.10
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-vested restricted stock
|
—
|
|
|
14
|
|
|
|
|
|
—
|
|
|
16
|
|
|
|
|
||||
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income available to common stockholders plus assumed conversions
|
$
|
31,035
|
|
|
11,318
|
|
|
$
|
2.74
|
|
|
$
|
23,578
|
|
|
11,267
|
|
|
$
|
2.09
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash and cash equivalents:
|
|
|
|
||||
Cash
|
$
|
47,323
|
|
|
$
|
61,703
|
|
Cash equivalents
|
85,330
|
|
|
73,608
|
|
||
|
132,653
|
|
|
135,311
|
|
||
Restricted cash
|
2,998
|
|
|
3,167
|
|
||
|
$
|
135,651
|
|
|
$
|
138,478
|
|
|
|
|
|
||||
Inventories:
|
|
|
|
||||
Finished goods
|
$
|
11,171
|
|
|
$
|
7,779
|
|
Raw materials
|
1,145
|
|
|
799
|
|
||
Reserve for obsolescence
|
(151
|
)
|
|
(180
|
)
|
||
|
$
|
12,165
|
|
|
$
|
8,398
|
|
Property and equipment:
|
|
|
|
||||
Office equipment
|
$
|
537
|
|
|
$
|
530
|
|
Office software
|
918
|
|
|
916
|
|
||
Machinery
|
29
|
|
|
30
|
|
||
Furniture and fixtures
|
319
|
|
|
276
|
|
||
Leasehold improvements
|
1,022
|
|
|
957
|
|
||
Construction in progress (including internal-use software development costs)
|
19
|
|
|
10
|
|
||
Property and equipment, at cost
|
2,844
|
|
|
2,719
|
|
||
Accumulated depreciation and amortization
|
(1,910
|
)
|
|
(1,570
|
)
|
||
|
$
|
934
|
|
|
$
|
1,149
|
|
Other accrued expenses:
|
|
|
|
||||
Sales returns
|
$
|
801
|
|
|
$
|
614
|
|
Employee-related expense
|
4,051
|
|
|
5,568
|
|
||
Warehousing, inventory-related and other
|
1,269
|
|
|
1,423
|
|
||
|
$
|
6,121
|
|
|
$
|
7,605
|
|
Deferred revenue:
|
|
|
|
|
|
||
Unshipped product
|
$
|
4,574
|
|
|
$
|
2,411
|
|
Auto ship advances
|
1,876
|
|
|
1,665
|
|
||
Other
|
345
|
|
|
379
|
|
||
|
$
|
6,795
|
|
|
$
|
4,455
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Adjusted Cost
|
|
Gross Unrealized Gains/Losses
|
|
Fair Value
|
|
Adjusted Cost
|
|
Gross Unrealized Gains/Losses
|
|
Fair Value
|
||||||||||||
Municipal bonds and notes
|
$
|
12,149
|
|
|
$
|
(7
|
)
|
|
$
|
12,142
|
|
|
$
|
13,320
|
|
|
$
|
(1
|
)
|
|
$
|
13,319
|
|
Corporate debt securities
|
51,862
|
|
|
(26
|
)
|
|
51,836
|
|
|
49,432
|
|
|
(24
|
)
|
|
49,408
|
|
||||||
Financial institution instruments
|
21,352
|
|
|
—
|
|
|
21,352
|
|
|
10,881
|
|
|
—
|
|
|
10,881
|
|
||||||
Total available-for-sale investments
|
$
|
85,363
|
|
|
$
|
(33
|
)
|
|
$
|
85,330
|
|
|
$
|
73,633
|
|
|
$
|
(25
|
)
|
|
$
|
73,608
|
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Amounts included in cash and cash equivalents
|
$
|
85,330
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85,330
|
|
Total assets measured at fair value on a recurring basis
|
$
|
85,330
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85,330
|
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Amounts included in cash and cash equivalents
|
$
|
73,608
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73,608
|
|
Total assets measured at fair value on a recurring basis
|
$
|
73,608
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73,608
|
|
2019
|
$
|
1,796
|
|
2020
|
1,340
|
|
|
2021
|
452
|
|
|
2022
|
332
|
|
|
2023
|
208
|
|
|
Thereafter
|
327
|
|
|
Total minimum lease obligations
|
$
|
4,455
|
|
Declaration Date
|
|
Per Common Share
|
|
Amount
|
|
Payment Date
|
||||
October 21, 2018 (special)
|
|
$
|
0.18
|
|
|
$
|
2,048
|
|
|
November 23, 2018
|
October 21, 2018
|
|
0.16
|
|
|
1,820
|
|
|
November 23, 2018
|
||
July 18, 2018 (special)
|
|
0.25
|
|
|
2,844
|
|
|
August 24, 2018
|
||
July 18, 2018
|
|
0.15
|
|
|
1,707
|
|
|
August 24, 2018
|
||
April 17, 2018 (special)
|
|
1.76
|
|
|
20,022
|
|
|
May 25, 2018
|
||
April 17, 2018
|
|
0.14
|
|
|
1,592
|
|
|
May 25, 2018
|
||
February 6, 2018
|
|
0.13
|
|
|
1,479
|
|
|
March 9, 2018
|
||
|
|
$
|
2.77
|
|
|
$
|
31,512
|
|
|
|
Declaration Date
|
|
Per Common Share
|
|
Amount
|
|
Payment Date
|
||||
October 30, 2017 (special)
|
|
$
|
0.15
|
|
|
$
|
1,701
|
|
|
November 24, 2017
|
October 30, 2017
|
|
0.12
|
|
|
1,360
|
|
|
November 24, 2017
|
||
July 31, 2017 (special)
|
|
0.25
|
|
|
2,833
|
|
|
August 31, 2017
|
||
July 31, 2017
|
|
0.11
|
|
|
1,246
|
|
|
August 31, 2017
|
||
April 24, 2017 (special)
|
|
0.35
|
|
|
3,964
|
|
|
May 19, 2017
|
||
April 24, 2017
|
|
0.10
|
|
|
1,133
|
|
|
May 19, 2017
|
||
January 24, 2017 (special)
|
|
0.35
|
|
|
3,962
|
|
|
March 3, 2017
|
||
January 24, 2017
|
|
0.09
|
|
|
1,019
|
|
|
March 3, 2017
|
||
|
|
$
|
1.52
|
|
|
$
|
17,218
|
|
|
|
|
Shares
|
|
Wtd. Avg. Price at Date of Issuance
|
|||
Nonvested at December 31, 2016
|
38,256
|
|
|
$
|
34.13
|
|
Granted
|
56,260
|
|
|
25.44
|
|
|
Vested
|
(35,336
|
)
|
|
29.58
|
|
|
Forfeited
|
(1,148
|
)
|
|
28.55
|
|
|
Nonvested at December 31, 2017
|
58,032
|
|
|
28.59
|
|
|
Granted
|
34,202
|
|
|
16.19
|
|
|
Vested
|
(46,748
|
)
|
|
26.31
|
|
|
Nonvested at December 31, 2018
|
45,486
|
|
|
21.61
|
|
|
Shares
|
|
Wtd. Avg. Price at Date of Issuance
|
|||
Nonvested at December 31, 2016
|
22,348
|
|
|
$
|
12.15
|
|
Vested
|
(21,930
|
)
|
|
12.15
|
|
|
Forfeited
|
(418
|
)
|
|
12.28
|
|
|
Nonvested at December 31, 2017
|
—
|
|
|
—
|
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Losses on Available-For-Sale Investments
|
|
Total
|
||||||
Balance, December 31, 2017
|
$
|
(386
|
)
|
|
$
|
(27
|
)
|
|
$
|
(413
|
)
|
Other comprehensive loss
|
(831
|
)
|
|
(6
|
)
|
|
(837
|
)
|
|||
Balance, December 31, 2018
|
$
|
(1,217
|
)
|
|
$
|
(33
|
)
|
|
$
|
(1,250
|
)
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Domestic
|
$
|
(3,391
|
)
|
|
$
|
(2,965
|
)
|
Foreign
|
37,912
|
|
|
46,391
|
|
||
Income before income taxes
|
$
|
34,521
|
|
|
$
|
43,426
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Current:
|
|
|
|
||||
Federal
|
$
|
1,815
|
|
|
$
|
20,277
|
|
State
|
13
|
|
|
2
|
|
||
Foreign
|
1,300
|
|
|
1,216
|
|
||
Total current taxes
|
3,128
|
|
|
21,495
|
|
||
Deferred taxes
|
358
|
|
|
(1,647
|
)
|
||
Income tax provision
|
$
|
3,486
|
|
|
$
|
19,848
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Income tax at federal statutory rate
|
$
|
7,249
|
|
|
$
|
15,200
|
|
Effect of permanent differences
|
346
|
|
|
459
|
|
||
Tax Cut & Jobs Act one-time transition tax
|
(738
|
)
|
|
20,792
|
|
||
Global Intangible Low Taxed Income
|
3,964
|
|
|
—
|
|
||
Tax Cut & Jobs Act federal rate change
|
(6
|
)
|
|
954
|
|
||
Change in valuation allowance
|
(9
|
)
|
|
(43
|
)
|
||
Foreign rate differential
|
(6,541
|
)
|
|
(15,002
|
)
|
||
Foreign tax credits
|
(786
|
)
|
|
(2,738
|
)
|
||
Other reconciling items
|
7
|
|
|
226
|
|
||
Income tax provision
|
$
|
3,486
|
|
|
$
|
19,848
|
|
|
|
|
Year Ended December 31,
|
|||||||
|
Statutory Tax Rate
|
|
2018
|
|
2017
|
|||||
Cayman Islands
|
—
|
%
|
|
$
|
31,560
|
|
|
$
|
39,954
|
|
Hong Kong
|
16.5
|
%
|
|
3,545
|
|
|
3,315
|
|
||
China
|
25.0
|
%
|
|
2,725
|
|
|
2,584
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating losses
|
$
|
183
|
|
|
$
|
192
|
|
Stock-based compensation
|
191
|
|
|
270
|
|
||
Accrued expenses
|
1,062
|
|
|
1,374
|
|
||
Other
|
11
|
|
|
6
|
|
||
Total deferred tax assets
|
1,447
|
|
|
1,842
|
|
||
Valuation allowance
|
(183
|
)
|
|
(192
|
)
|
||
Net deferred tax assets
|
1,264
|
|
|
1,650
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Foreign earnings
|
(2
|
)
|
|
(4
|
)
|
||
Other
|
(241
|
)
|
|
(267
|
)
|
||
Total deferred tax liabilities
|
(243
|
)
|
|
(271
|
)
|
||
Net deferred tax assets
|
$
|
1,021
|
|
|
$
|
1,379
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Net sales from external customers:
|
|
|
|
||||
United States
|
$
|
3,637
|
|
|
$
|
3,348
|
|
Canada
|
1,710
|
|
|
1,938
|
|
||
Peru
|
1,635
|
|
|
508
|
|
||
Hong Kong1
|
169,452
|
|
|
174,926
|
|
||
China
|
7,744
|
|
|
7,282
|
|
||
Taiwan
|
3,964
|
|
|
5,591
|
|
||
South Korea
|
493
|
|
|
466
|
|
||
Russia and Kazakhstan
|
868
|
|
|
913
|
|
||
Europe
|
1,644
|
|
|
2,278
|
|
||
Other foreign countries
|
763
|
|
|
313
|
|
||
Total net sales
|
$
|
191,910
|
|
|
$
|
197,563
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Net sales by product and service:
|
|
|
|
||||
Product sales
|
$
|
181,865
|
|
|
$
|
187,591
|
|
Freight and other
|
13,329
|
|
|
13,676
|
|
||
Less: sales returns
|
(3,284
|
)
|
|
(3,704
|
)
|
||
Total net sales
|
$
|
191,910
|
|
|
$
|
197,563
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
521
|
|
|
$
|
648
|
|
Hong Kong
|
145
|
|
|
78
|
|
||
China
|
61
|
|
|
112
|
|
||
Other foreign countries
|
207
|
|
|
311
|
|
||
Total long-lived assets
|
$
|
934
|
|
|
$
|
1,149
|
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
1.
|
Financial Statements. See Index to Consolidated Financial Statements under “Item 8. Financial Statements and Supplementary Data” of this report.
|
2.
|
Financial Statement Schedules. Financial statement schedules have been omitted because they are not required, not applicable, or because the required information is shown in the financial statements or notes thereto.
|
3.
|
Exhibits. The exhibits listed on the accompanying Exhibit Index are filed as a part of, and are incorporated by reference into, this report. We will furnish any of the exhibits referenced in the accompanying Exhibit Index to a requesting shareholder upon payment of a fee equal to our reasonable expenses in furnishing such exhibit(s).
|
|
NATURAL HEALTH TRENDS CORP.
|
|
|
|
|
Date: April 26, 2019
|
/s/ Chris T. Sharng
|
|
|
Chris T. Sharng
|
|
|
President
|
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Chris T. Sharng
|
|
President and Director
|
|
April 26, 2019
|
Chris T. Sharng
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Timothy S. Davidson
|
|
Senior Vice President and Chief Financial Officer
|
|
April 26, 2019
|
Timothy S. Davidson
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Randall A. Mason
|
|
Chairman of the Board and Director
|
|
April 26, 2019
|
Randall A. Mason
|
|
|
|
|
|
|
|
|
|
/s/ George K. Broady
|
|
Director
|
|
April 26, 2019
|
George K. Broady
|
|
|
|
|
|
|
|
|
|
/s/ Kin Y. Chung
|
|
Director
|
|
April 26, 2019
|
Kin Y. Chung
|
|
|
|
|
|
|
|
|
|
/s/ Yiu T. Chan
|
|
Director
|
|
April 26, 2019
|
Yiu T. Chan
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
3.1
|
|
|
3.3
|
|
Amended and Restated Bylaws of Natural Health Trends Corp. effective March 27, 2018 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 28, 2018).
|
4.1
|
|
|
+10.1
|
|
|
+10.2
|
|
|
+10.3
|
|
|
+10.4
|
|
|
+10.5
|
|
|
+10.6
|
|
|
+10.7
|
|
|
+10.8
|
|
|
+10.9
|
|
|
21.1
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
|
|
|
|
|
|
101.INS
|
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation
|
101.DEF
|
|
XBRL Taxonomy Extension Definition
|
101.LAB
|
|
XBRL Taxonomy Extension Labels
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation
|
|
|
+ Management contract or compensatory plan
|
Name
|
|
Jurisdiction
|
|
|
|
NHT Global, Inc.
|
|
United States (Delaware)
|
NHTC International, LLC
|
|
United States (Delaware)
|
NHT Global (Canada) Company
|
|
Canada
|
NHTC Holding Company
|
|
Cayman Islands
|
NHTC Trading Company
|
|
Cayman Islands
|
NHT Global Taiwan Company
|
|
Cayman Islands
|
NHT Global CIS Company
|
|
Cayman Islands
|
NHT Global (China) Commodities Co., Ltd.
|
|
China
|
NHT Global (Zhongshan) Cosmetics Co., Ltd.
|
|
China
|
NHT Global Hong Kong Limited
|
|
Hong Kong
|
Natural Health Trends Japan, Inc.
|
|
Japan
|
NHTC Global Singapore Pte. Ltd.
|
|
Singapore
|
NHTC Wellness Products Malaysia Sdn. Bhd.
|
|
Malaysia
|
NHTK Ltd.
|
|
South Korea
|
NHT Global Europe S.R.L.
|
|
Italy
|
NHT Global Peru S.A.C.
|
|
Peru
|
Natural Health Trends (Thailand) Ltd.
|
|
Thailand
|
NHT Global Limited Company
|
|
Vietnam
|
PT Natural Health Trends Indonesia
|
|
Indonesia
|
NHTC (India) Private Limited
|
|
India
|
Date: April 26, 2019
|
|
/s/ Chris T. Sharng
|
|
|
|
Chris T. Sharng
|
|
|
|
President
|
|
|
|
(Principal Executive Officer)
|
|
Date: April 26, 2019
|
|
/s/ Timothy S. Davidson
|
|
|
|
Timothy S. Davidson
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
Date: April 26, 2019
|
|
/s/ Chris T. Sharng
|
|
|
|
Chris T. Sharng
|
|
|
|
President
|
|
|
|
(Principal Executive Officer)
|
|
Date: April 26, 2019
|
|
/s/ Timothy S. Davidson
|
|
|
|
Timothy S. Davidson
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|