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x
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QUARTERLY 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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Texas
|
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75-2508900
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(State or other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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600 S. Royal Lane, Suite 200, Coppell, Texas
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75019
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
x
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Emerging Growth Company
¨
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Part I – FINANCIAL INFORMATION
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Part II – OTHER INFORMATION
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•
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future plans related to budgets, future capital requirements, market share growth, and anticipated capital projects and obligations;
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•
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the future impact of our planned changes to global associate career and compensation plans or incentives or the regulations thereto;
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ASSETS
|
June 30, 2017
(unaudited) |
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
35,561
|
|
|
$
|
28,687
|
|
Restricted cash
|
1,514
|
|
|
1,510
|
|
||
Accounts receivable, net of allowance of $507 and $463 in 2017 and 2016, respectively
|
405
|
|
|
298
|
|
||
Income tax receivable
|
3
|
|
|
1,587
|
|
||
Inventories, net
|
10,868
|
|
|
11,961
|
|
||
Prepaid expenses and other current assets, net
|
2,659
|
|
|
3,483
|
|
||
Deferred commissions
|
3,233
|
|
|
3,229
|
|
||
Total current assets
|
54,243
|
|
|
50,755
|
|
||
Property and equipment, net
|
3,234
|
|
|
3,611
|
|
||
Construction in progress
|
1,294
|
|
|
1,012
|
|
||
Long-term restricted cash
|
6,776
|
|
|
6,429
|
|
||
Other assets
|
3,617
|
|
|
4,013
|
|
||
Long-term deferred tax assets, net
|
5,595
|
|
|
5,368
|
|
||
Total assets
|
$
|
74,759
|
|
|
$
|
71,188
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current portion of capital leases
|
$
|
392
|
|
|
$
|
357
|
|
Accounts payable
|
6,130
|
|
|
5,223
|
|
||
Accrued expenses
|
5,139
|
|
|
5,605
|
|
||
Commissions and incentives payable
|
9,679
|
|
|
8,799
|
|
||
Taxes payable
|
1,528
|
|
|
1,040
|
|
||
Current notes payable
|
843
|
|
|
801
|
|
||
Deferred revenue
|
8,326
|
|
|
8,156
|
|
||
Total current liabilities
|
32,037
|
|
|
29,981
|
|
||
Capital leases, excluding current portion
|
182
|
|
|
261
|
|
||
Long-term deferred tax liabilities
|
30
|
|
|
29
|
|
||
Long-term notes payable
|
286
|
|
|
567
|
|
||
Other long-term liabilities
|
1,413
|
|
|
1,465
|
|
||
Total liabilities
|
33,948
|
|
|
32,303
|
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||
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||||
Commitments and contingencies
|
|
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||
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||||
Shareholders’ equity:
|
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Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding
|
—
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—
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Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,753,789 shares issued and 2,711,372 shares outstanding as of June 30, 2017 and 2,758,275 shares issued and 2,688,790 shares outstanding as of December 31, 2016
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
35,293
|
|
|
38,190
|
|
||
Retained earnings
|
7,202
|
|
|
7,331
|
|
||
Accumulated other comprehensive income
|
3,482
|
|
|
1,834
|
|
||
Treasury stock, at average cost, 42,417 shares as of June 30, 2017 and 69,485 shares as of December 31, 2016, respectively
|
(5,166
|
)
|
|
(8,470
|
)
|
||
Total shareholders’ equity
|
40,811
|
|
|
38,885
|
|
||
Total liabilities and shareholders’ equity
|
$
|
74,759
|
|
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$
|
71,188
|
|
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Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
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2017
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2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
47,686
|
|
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$
|
48,810
|
|
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$
|
88,327
|
|
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$
|
89,518
|
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Cost of sales
|
8,786
|
|
|
10,100
|
|
|
17,548
|
|
|
18,489
|
|
||||
Gross profit
|
38,900
|
|
|
38,710
|
|
|
70,779
|
|
|
71,029
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||||
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||||||||
Operating expenses:
|
|
|
|
|
|
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|
||||
Commissions and incentives
|
18,994
|
|
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20,417
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|
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36,075
|
|
|
36,034
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|
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Selling and administrative expenses
|
9,978
|
|
|
9,730
|
|
|
18,632
|
|
|
18,322
|
|
||||
Depreciation and amortization expense
|
453
|
|
|
477
|
|
|
955
|
|
|
920
|
|
||||
Other operating costs
|
6,656
|
|
|
8,198
|
|
|
14,332
|
|
|
15,329
|
|
||||
Total operating expenses
|
36,081
|
|
|
38,822
|
|
|
69,994
|
|
|
70,605
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|
||||
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|
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Income (loss) from operations
|
2,819
|
|
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(112
|
)
|
|
785
|
|
|
424
|
|
||||
Interest income
|
19
|
|
|
23
|
|
|
48
|
|
|
11
|
|
||||
Other income (expense), net
|
(9
|
)
|
|
(1,037
|
)
|
|
32
|
|
|
(703
|
)
|
||||
Income (loss) before income taxes
|
2,829
|
|
|
(1,126
|
)
|
|
865
|
|
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(268
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax provision
|
(1,034
|
)
|
|
(206
|
)
|
|
(317
|
)
|
|
(472
|
)
|
||||
Net income (loss)
|
$
|
1,795
|
|
|
$
|
(1,332
|
)
|
|
$
|
548
|
|
|
$
|
(740
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
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|
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|
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Basic
|
$
|
0.66
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.20
|
|
|
$
|
(0.27
|
)
|
Diluted
|
$
|
0.65
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.19
|
|
|
$
|
(0.27
|
)
|
|
|
|
|
|
|
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|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
2,711
|
|
|
2,707
|
|
|
2,706
|
|
|
2,701
|
|
||||
Diluted
|
2,778
|
|
|
2,707
|
|
|
2,775
|
|
|
2,701
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
1,795
|
|
|
$
|
(1,332
|
)
|
|
$
|
548
|
|
|
$
|
(740
|
)
|
Foreign currency translations
|
(731
|
)
|
|
917
|
|
|
1,648
|
|
|
1,504
|
|
||||
Comprehensive income (loss)
|
$
|
1,064
|
|
|
$
|
(415
|
)
|
|
$
|
2,196
|
|
|
$
|
764
|
|
|
Common stock
Par value |
|
Additional
paid in capital |
|
Retained
earnings |
|
Accumulated
other comprehensive income |
|
Treasury
stock |
|
Total
shareholders’ equity |
||||||||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
38,190
|
|
|
$
|
7,331
|
|
|
$
|
1,834
|
|
|
$
|
(8,470
|
)
|
|
$
|
38,885
|
|
Net income
|
—
|
|
|
—
|
|
|
548
|
|
|
—
|
|
|
—
|
|
|
548
|
|
||||||
Declared dividends
|
—
|
|
|
—
|
|
|
(677
|
)
|
|
—
|
|
|
—
|
|
|
(677
|
)
|
||||||
Charge related to stock-based compensation
|
—
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
||||||
Issuance of unrestricted shares
|
—
|
|
|
(1,228
|
)
|
|
—
|
|
|
—
|
|
|
1,473
|
|
|
245
|
|
||||||
Stock option exercises
|
—
|
|
|
(1,748
|
)
|
|
—
|
|
|
—
|
|
|
1,831
|
|
|
83
|
|
||||||
Repurchase of common stock
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
||||||
Foreign currency translations
|
—
|
|
|
—
|
|
|
—
|
|
|
1,648
|
|
|
—
|
|
|
1,648
|
|
||||||
Balance at June 30, 2017
|
$
|
—
|
|
|
$
|
35,293
|
|
|
$
|
7,202
|
|
|
$
|
3,482
|
|
|
$
|
(5,166
|
)
|
|
$
|
40,811
|
|
|
Six Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
548
|
|
|
$
|
(740
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
:
|
|
|
|
|
|
||
Depreciation and amortization
|
955
|
|
|
920
|
|
||
Provision for inventory losses
|
202
|
|
|
157
|
|
||
Provision for doubtful accounts
|
73
|
|
|
422
|
|
||
Loss on disposal of assets
|
—
|
|
|
3
|
|
||
Stock-based compensation expense
|
388
|
|
|
360
|
|
||
Deferred income taxes
|
(191
|
)
|
|
(166
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(169
|
)
|
|
(167
|
)
|
||
Income tax receivable
|
1,590
|
|
|
(8
|
)
|
||
Inventories
|
1,155
|
|
|
(2,412
|
)
|
||
Prepaid expenses and other current assets
|
1,207
|
|
|
590
|
|
||
Other assets
|
561
|
|
|
400
|
|
||
Deferred commissions
|
51
|
|
|
(674
|
)
|
||
Accounts payable
|
882
|
|
|
3,704
|
|
||
Accrued expenses and other liabilities
|
(701
|
)
|
|
(934
|
)
|
||
Taxes payable
|
493
|
|
|
469
|
|
||
Commissions and incentives payable
|
730
|
|
|
1,832
|
|
||
Deferred revenue
|
57
|
|
|
1,814
|
|
||
Change in restricted cash
|
(19
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
7,812
|
|
|
5,570
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(680
|
)
|
|
(1,408
|
)
|
||
Net cash used in investing activities
|
(680
|
)
|
|
(1,408
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from stock options exercised
|
83
|
|
|
11
|
|
||
Repurchase of common stock
|
(64
|
)
|
|
—
|
|
||
Payment of cash dividends
|
(677
|
)
|
|
—
|
|
||
Repayment of capital lease obligations
|
(778
|
)
|
|
(723
|
)
|
||
Net cash used in financing activities
|
(1,436
|
)
|
|
(712
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
1,178
|
|
|
1,477
|
|
||
Net increase in cash and cash equivalents
|
6,874
|
|
|
4,927
|
|
||
Cash and cash equivalents at the beginning of the period
|
28,687
|
|
|
31,994
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
35,561
|
|
|
$
|
36,921
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||
Income taxes paid
|
$
|
479
|
|
|
$
|
1,519
|
|
Interest paid on capital leases and financing arrangements
|
$
|
37
|
|
|
$
|
63
|
|
Assets acquired through financing arrangements
|
$
|
130
|
|
|
$
|
409
|
|
Loyalty program
|
(in thousands)
|
|
|
Loyalty deferred revenue as of January 1, 2016
|
$
|
8,073
|
|
Loyalty points forfeited or expired
|
(6,963
|
)
|
|
Loyalty points used
|
(15,451
|
)
|
|
Loyalty points vested
|
20,085
|
|
|
Loyalty points unvested
|
1,289
|
|
|
Loyalty deferred revenue as of December 31, 2016
|
$
|
7,033
|
|
Loyalty deferred revenue as of January 1, 2017
|
$
|
7,033
|
|
Loyalty points forfeited or expired
|
(3,370
|
)
|
|
Loyalty points used
|
(6,957
|
)
|
|
Loyalty points vested
|
7,585
|
|
|
Loyalty points unvested
|
1,916
|
|
|
Loyalty deferred revenue as of June 30, 2017
|
$
|
6,207
|
|
Sales reserve as of January 1, 2017
|
$
|
129
|
|
Provision related to sales made in current period
|
591
|
|
|
Adjustment related to sales made in prior periods
|
3
|
|
|
Actual returns or credits related to current period
|
(457
|
)
|
|
Actual returns or credits related to prior periods
|
(132
|
)
|
|
Sales reserve as of June 30, 2017
|
$
|
134
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
267
|
|
|
$
|
239
|
|
Finished goods
|
11,021
|
|
|
12,103
|
|
||
Inventory reserves for obsolescence
|
(420
|
)
|
|
(381
|
)
|
||
Total
|
$
|
10,868
|
|
|
$
|
11,961
|
|
|
Three months ending June 30
|
|
Six months
ending June 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total gross compensation expense
|
$
|
67
|
|
|
$
|
141
|
|
|
$
|
143
|
|
|
$
|
360
|
|
Total tax benefit associated with compensation expense
|
15
|
|
|
28
|
|
|
28
|
|
|
47
|
|
||||
Total net compensation expense
|
$
|
52
|
|
|
$
|
113
|
|
|
$
|
115
|
|
|
$
|
313
|
|
|
Six months
ending
December 31,
2017
|
|
Year ending December 31,
|
||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|||||||||
Total gross unrecognized compensation expense
|
$
|
103
|
|
|
$
|
122
|
|
|
$
|
38
|
|
|
$
|
—
|
|
Tax benefit associated with unrecognized compensation expense
|
17
|
|
|
20
|
|
|
3
|
|
|
—
|
|
||||
Total net unrecognized compensation expense
|
$
|
86
|
|
|
$
|
102
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
Foreign
Currency
Translation and Remeasurement
(2)
|
|
Pension
Postretirement
Benefit
Obligation
|
|
Accumulated
Other
Comprehensive
Income, Net
|
||||||
Balance as of December 31, 2016
|
$
|
1,534
|
|
|
$
|
300
|
|
|
$
|
1,834
|
|
Current-period change
(1)
|
1,648
|
|
|
—
|
|
|
1,648
|
|
|||
Balance as of June 30, 2017
|
$
|
3,182
|
|
|
$
|
300
|
|
|
$
|
3,482
|
|
•
|
Level 1 – Quoted unadjusted prices for identical instruments in active markets.
|
•
|
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets.
|
•
|
Level 3 – Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company.
|
June 30, 2017
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money Market Funds – Fidelity, US
|
$
|
202
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
202
|
|
Interest bearing deposits – various banks
|
24,547
|
|
|
—
|
|
|
—
|
|
|
24,547
|
|
||||
Total assets
|
$
|
24,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,749
|
|
Amounts included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,412
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,412
|
|
Restricted cash
|
741
|
|
|
—
|
|
|
—
|
|
|
741
|
|
||||
Long-term restricted cash
|
5,596
|
|
|
—
|
|
|
—
|
|
|
5,596
|
|
||||
Total
|
$
|
24,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,749
|
|
December 31, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money Market Funds – Fidelity, US
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Interest bearing deposits – various banks
|
19,357
|
|
|
—
|
|
|
—
|
|
|
19,357
|
|
||||
Total assets
|
$
|
19,369
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,369
|
|
Amounts included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
13,326
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,326
|
|
Restricted cash
|
737
|
|
|
—
|
|
|
—
|
|
|
737
|
|
||||
Long-term restricted cash
|
5,306
|
|
|
—
|
|
|
—
|
|
|
5,306
|
|
||||
Total
|
$
|
19,369
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,369
|
|
|
Three months
|
|
Six months
|
||||||||||||||||||||||||
Region
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
Americas
|
$
|
19.5
|
|
|
40.9
|
%
|
|
$
|
19.0
|
|
|
38.9
|
%
|
|
$
|
35.0
|
|
|
39.6
|
%
|
|
$
|
35.0
|
|
|
39.1
|
%
|
Asia/Pacific
|
24.7
|
|
|
51.8
|
%
|
|
26.3
|
|
|
53.9
|
%
|
|
46.6
|
|
|
52.8
|
%
|
|
47.7
|
|
|
53.3
|
%
|
||||
EMEA
|
3.5
|
|
|
7.3
|
%
|
|
3.5
|
|
|
7.2
|
%
|
|
6.7
|
|
|
7.6
|
%
|
|
6.8
|
|
|
7.6
|
%
|
||||
Totals
|
$
|
47.7
|
|
|
100.0
|
%
|
|
$
|
48.8
|
|
|
100.0
|
%
|
|
$
|
88.3
|
|
|
100.0
|
%
|
|
$
|
89.5
|
|
|
100.0
|
%
|
|
Three months
|
|
Six Months
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Consolidated product sales
|
$
|
40.3
|
|
|
$
|
40.1
|
|
|
$
|
74.1
|
|
|
$
|
73.8
|
|
Consolidated pack sales
|
6.0
|
|
|
7.5
|
|
|
11.7
|
|
|
13.2
|
|
||||
Consolidated other, including freight
|
1.4
|
|
|
1.2
|
|
|
2.5
|
|
|
2.5
|
|
||||
Consolidated total net sales
|
$
|
47.7
|
|
|
$
|
48.8
|
|
|
$
|
88.3
|
|
|
$
|
89.5
|
|
Region
|
June 30, 2017
|
|
December 31, 2016
|
||||
Americas
|
$
|
3.1
|
|
|
$
|
3.1
|
|
Asia/Pacific
|
1.4
|
|
|
1.4
|
|
||
EMEA
|
—
|
|
|
0.1
|
|
||
Total
|
$
|
4.5
|
|
|
$
|
4.6
|
|
Region
|
June 30, 2017
|
|
December 31, 2016
|
||||
Americas
|
$
|
4.1
|
|
|
$
|
4.8
|
|
Asia/Pacific
|
4.9
|
|
|
4.2
|
|
||
EMEA
|
1.9
|
|
|
3.0
|
|
||
Total
|
$
|
10.9
|
|
|
$
|
12.0
|
|
•
|
The loyalty program
increased
net sales for the
three
and
six
months ended
June 30, 2017
by
$0.7 million
and
$1.1 million
, respectively, as compared to the same period in
2016
.
|
•
|
The number of packs sold to new and continuing independent associates and members decreased 12.8% during the second quarter of
2017
to approximately 30,700 as compared to 35,200 during the same period in
2016
. This decrease was further impacted by a $17 decrease in average pack sale, to $195 for the
three
months ended
June 30, 2017
, as compared to $212 for the same period in
2016
. The number of packs sold to new and continuing independent associates and members decreased 8.2% for the
six
months ended
June 30, 2017
to approximately 59,300 as compared to 64,600 during the same period in
2016
. This decrease was further impacted by an $8 decrease in average pack sale, to $197 for the
six
months ended
June 30, 2017
, as compared to $205 for the same period in
2016
.
|
|
2017
|
|
2016
|
|
Change from
2017 to 2016
|
|||||||||||||||
|
Total
dollars
|
|
% of
net sales
|
|
Total
dollars
|
|
% of
net sales
|
|
Dollar
|
|
Percentage
|
|||||||||
Net sales
|
$
|
47,686
|
|
|
100.0
|
%
|
|
$
|
48,810
|
|
|
100.0
|
%
|
|
$
|
(1,124
|
)
|
|
(2.3
|
)%
|
Cost of sales
|
8,786
|
|
|
18.4
|
%
|
|
10,100
|
|
|
20.7
|
%
|
|
(1,314
|
)
|
|
(13.0
|
)%
|
|||
Gross profit
|
38,900
|
|
|
81.6
|
%
|
|
38,710
|
|
|
79.3
|
%
|
|
190
|
|
|
0.5
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commissions and incentives
|
18,994
|
|
|
39.8
|
%
|
|
20,417
|
|
|
41.8
|
%
|
|
(1,423
|
)
|
|
(7.0
|
)%
|
|||
Selling and administrative expenses
|
9,978
|
|
|
20.9
|
%
|
|
9,730
|
|
|
19.9
|
%
|
|
248
|
|
|
2.5
|
%
|
|||
Depreciation and amortization expense
|
453
|
|
|
0.9
|
%
|
|
477
|
|
|
1.0
|
%
|
|
(24
|
)
|
|
(5.0
|
)%
|
|||
Other operating costs
|
6,656
|
|
|
14.0
|
%
|
|
8,198
|
|
|
16.8
|
%
|
|
(1,542
|
)
|
|
(18.8
|
)%
|
|||
Total operating expenses
|
36,081
|
|
|
75.7
|
%
|
|
38,822
|
|
|
79.5
|
%
|
|
(2,741
|
)
|
|
(7.1
|
)%
|
|||
Income (loss) from operations
|
2,819
|
|
|
5.9
|
%
|
|
(112
|
)
|
|
(0.2
|
)%
|
|
2,931
|
|
|
2,617.0
|
%
|
|||
Interest income
|
19
|
|
|
—
|
%
|
|
23
|
|
|
—
|
%
|
|
(4
|
)
|
|
(17.4
|
)%
|
|||
Other income (expense), net
|
(9
|
)
|
|
—
|
%
|
|
(1,037
|
)
|
|
(2.1
|
)%
|
|
1,028
|
|
|
99.1
|
%
|
|||
Income (loss) before income taxes
|
2,829
|
|
|
5.9
|
%
|
|
(1,126
|
)
|
|
(2.3
|
)%
|
|
3,955
|
|
|
351.2
|
%
|
|||
Provision for income taxes
|
(1,034
|
)
|
|
(2.2
|
)%
|
|
(206
|
)
|
|
(0.4
|
)%
|
|
(828
|
)
|
|
(401.9
|
)%
|
|||
Net income (loss)
|
$
|
1,795
|
|
|
3.8
|
%
|
|
$
|
(1,332
|
)
|
|
(2.7
|
)%
|
|
$
|
3,127
|
|
|
234.8
|
%
|
|
2017
|
|
2016
|
|
Change from
2017 to 2016
|
|||||||||||||||
|
Total
dollars
|
|
% of
net sales
|
|
Total
dollars
|
|
% of
net sales
|
|
Dollar
|
|
Percentage
|
|||||||||
Net sales
|
$
|
88,327
|
|
|
100.0
|
%
|
|
$
|
89,518
|
|
|
100.0
|
%
|
|
$
|
(1,191
|
)
|
|
(1.3
|
)%
|
Cost of sales
|
17,548
|
|
|
19.9
|
%
|
|
18,489
|
|
|
20.7
|
%
|
|
(941
|
)
|
|
(5.1
|
)%
|
|||
Gross profit
|
70,779
|
|
|
80.1
|
%
|
|
71,029
|
|
|
79.3
|
%
|
|
(250
|
)
|
|
(0.4
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commissions and incentives
|
36,075
|
|
|
40.8
|
%
|
|
36,034
|
|
|
40.3
|
%
|
|
41
|
|
|
0.1
|
%
|
|||
Selling and administrative expenses
|
18,632
|
|
|
21.1
|
%
|
|
18,322
|
|
|
20.5
|
%
|
|
310
|
|
|
1.7
|
%
|
|||
Depreciation and amortization expense
|
955
|
|
|
1.1
|
%
|
|
920
|
|
|
1.0
|
%
|
|
35
|
|
|
3.8
|
%
|
|||
Other operating costs
|
14,332
|
|
|
16.2
|
%
|
|
15,329
|
|
|
17.1
|
%
|
|
(997
|
)
|
|
(6.5
|
)%
|
|||
Total operating expenses
|
69,994
|
|
|
79.2
|
%
|
|
70,605
|
|
|
78.9
|
%
|
|
(611
|
)
|
|
(0.9
|
)%
|
|||
Income (loss) from operations
|
785
|
|
|
0.9
|
%
|
|
424
|
|
|
0.5
|
%
|
|
361
|
|
|
85.1
|
%
|
|||
Interest income (expense)
|
48
|
|
|
0.1
|
%
|
|
11
|
|
|
—
|
%
|
|
37
|
|
|
336.4
|
%
|
|||
Other income (expense), net
|
32
|
|
|
—
|
%
|
|
(703
|
)
|
|
(0.8
|
)%
|
|
735
|
|
|
104.6
|
%
|
|||
Income (loss) before income taxes
|
865
|
|
|
1.0
|
%
|
|
(268
|
)
|
|
(0.3
|
)%
|
|
1,133
|
|
|
422.8
|
%
|
|||
Provision for income taxes
|
(317
|
)
|
|
(0.4
|
)%
|
|
(472
|
)
|
|
(0.5
|
)%
|
|
155
|
|
|
32.8
|
%
|
|||
Net income (loss)
|
$
|
548
|
|
|
0.6
|
%
|
|
$
|
(740
|
)
|
|
(0.8
|
)%
|
|
$
|
1,288
|
|
|
174.1
|
%
|
Three-month period ended
(in millions, except percentages)
|
June 30, 2017
|
|
June 30, 2016
|
|
Constant $ Change
|
|||||||||||||
|
GAAP
Measure:
Total $
|
|
Non-GAAP
Measure:
Constant $
|
|
GAAP
Measure:
Total $
|
|
Dollar
|
|
Percent
|
|||||||||
Net sales
|
$
|
47.7
|
|
|
$
|
47.1
|
|
|
$
|
48.8
|
|
|
$
|
(1.7
|
)
|
|
(3.5
|
)%
|
Product
|
40.3
|
|
|
39.8
|
|
|
40.1
|
|
|
(0.3
|
)
|
|
(0.7
|
)%
|
||||
Pack
|
6.0
|
|
|
5.9
|
|
|
7.5
|
|
|
(1.6
|
)
|
|
(21.3
|
)%
|
||||
Other
|
1.4
|
|
|
1.4
|
|
|
1.2
|
|
|
0.2
|
|
|
16.7
|
%
|
||||
Gross profit
|
38.9
|
|
|
38.4
|
|
|
38.7
|
|
|
(0.3
|
)
|
|
(0.8
|
)%
|
||||
Income (loss) from operations
|
2.8
|
|
|
2.5
|
|
|
(0.1
|
)
|
|
2.6
|
|
|
(2,600.0
|
)%
|
Region
|
Three Months Ended
June 30, 2017 |
|
Three Months Ended
June 30, 2016 |
||||||||||
Americas
|
$
|
19.5
|
|
|
40.9
|
%
|
|
$
|
19.0
|
|
|
38.9
|
%
|
Asia/Pacific
|
24.7
|
|
|
51.8
|
%
|
|
26.3
|
|
|
53.9
|
%
|
||
EMEA
|
3.5
|
|
|
7.3
|
%
|
|
3.5
|
|
|
7.2
|
%
|
||
Total
|
$
|
47.7
|
|
|
100.0
|
%
|
|
$
|
48.8
|
|
|
100.0
|
%
|
Region
|
Six Months Ended
June 30, 2017 |
|
Six Months Ended
June 30, 2016 |
||||||||||
Americas
|
$
|
35.0
|
|
|
39.6
|
%
|
|
$
|
35.0
|
|
|
39.1
|
%
|
Asia/Pacific
|
46.6
|
|
|
52.8
|
%
|
|
47.7
|
|
|
53.3
|
%
|
||
EMEA
|
6.7
|
|
|
7.6
|
%
|
|
6.8
|
|
|
7.6
|
%
|
||
Total
|
$
|
88.3
|
|
|
100.0
|
%
|
|
$
|
89.5
|
|
|
100.0
|
%
|
•
|
changes in our sales prices;
|
•
|
changes in shipping fees;
|
•
|
changes in consumer demand;
|
•
|
changes in the number of independent associates and members;
|
•
|
changes in competitors’ products;
|
•
|
changes in economic conditions;
|
•
|
changes in regulations;
|
•
|
announcements of new scientific studies and breakthroughs;
|
•
|
introduction of new products;
|
•
|
discontinuation of existing products;
|
•
|
adverse publicity;
|
•
|
changes in our commissions and incentives programs;
|
•
|
direct competition; and
|
•
|
fluctuations in foreign currency exchange rates.
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
|
2017
|
|
2016
|
|
Dollar
|
|
Percentage
|
|||||||
Consolidated product sales
|
$
|
40.3
|
|
|
$
|
40.1
|
|
|
$
|
0.2
|
|
|
0.5
|
%
|
Consolidated pack sales
|
6.0
|
|
|
7.5
|
|
|
(1.5
|
)
|
|
(20.0
|
)%
|
|||
Consolidated other, including freight
|
1.4
|
|
|
1.2
|
|
|
0.2
|
|
|
16.7
|
%
|
|||
Total consolidated net sales
|
$
|
47.7
|
|
|
$
|
48.8
|
|
|
$
|
(1.1
|
)
|
|
(2.3
|
)%
|
|
Six Months Ended
June 30, |
|
Change
|
|||||||||||
|
2017
|
|
2016
|
|
Dollar
|
|
Percentage
|
|||||||
Consolidated product sales
|
$
|
74.1
|
|
|
$
|
73.8
|
|
|
$
|
0.3
|
|
|
0.4
|
%
|
Consolidated pack sales
|
11.7
|
|
|
13.2
|
|
|
(1.5
|
)
|
|
(11.4
|
)%
|
|||
Consolidated other, including freight
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
—
|
%
|
|||
Total consolidated net sales
|
$
|
88.3
|
|
|
$
|
89.5
|
|
|
$
|
(1.2
|
)
|
|
(1.3
|
)%
|
•
|
registered our most popular products with the appropriate regulatory agencies in all countries of operations;
|
•
|
rolled out new products;
|
•
|
launched an aggressive marketing and educational campaign;
|
•
|
continued to strengthen compliance initiatives;
|
•
|
concentrated on publishing results of research studies and clinical trials related to our products;
|
•
|
initiated additional incentives;
|
•
|
explored new advertising and educational tools to broaden name recognition; and
|
•
|
implemented changes to our global associate career and compensation plan.
|
|
2017
|
|
2016
|
||||||||
New
|
100,000
|
|
|
45.9
|
%
|
|
97,000
|
|
|
43.7
|
%
|
Continuing
|
118,000
|
|
|
54.1
|
%
|
|
125,000
|
|
|
56.3
|
%
|
Total
|
218,000
|
|
|
100.0
|
%
|
|
222,000
|
|
|
100.0
|
%
|
Country
|
2017
|
|
2016
|
||
Australia
|
30.0
|
%
|
|
30.0
|
%
|
Canada
|
26.5
|
%
|
|
26.5
|
%
|
China
|
25.0
|
%
|
|
25.0
|
%
|
Colombia
|
34.0
|
%
|
|
25.0
|
%
|
Cyprus
|
12.5
|
%
|
|
12.5
|
%
|
Denmark
|
22.0
|
%
|
|
22.0
|
%
|
Gibraltar
|
10.0
|
%
|
|
10.0
|
%
|
Hong Kong
|
16.5
|
%
|
|
16.5
|
%
|
Japan
|
34.8
|
%
|
|
35.4
|
%
|
Mexico
|
30.0
|
%
|
|
30.0
|
%
|
Norway
|
24.0
|
%
|
|
25.0
|
%
|
Republic of Korea
|
22.0
|
%
|
|
22.0
|
%
|
Russia
(1)
|
20.0
|
%
|
|
—
|
%
|
Singapore
|
17.0
|
%
|
|
17.0
|
%
|
South Africa
|
28.0
|
%
|
|
28.0
|
%
|
Sweden
|
22.0
|
%
|
|
22.0
|
%
|
Switzerland
|
16.2
|
%
|
|
16.2
|
%
|
Taiwan
|
17.0
|
%
|
|
17.0
|
%
|
Ukraine
(2)
|
18.0
|
%
|
|
18.0
|
%
|
United Kingdom
|
20.0
|
%
|
|
20.0
|
%
|
United States
|
37.5
|
%
|
|
37.5
|
%
|
Country
|
June 30, 2017
|
|
December 31, 2016
|
||||
Colombia
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Mexico
|
2.8
|
|
|
2.4
|
|
||
Sweden
|
0.1
|
|
|
0.1
|
|
||
Switzerland
|
—
|
|
|
0.1
|
|
||
Taiwan
|
0.8
|
|
|
1.3
|
|
||
Ukraine
|
0.1
|
|
|
0.1
|
|
||
United States
|
4.1
|
|
|
4.1
|
|
||
Other Jurisdictions
|
0.1
|
|
|
0.1
|
|
||
Total
|
$
|
8.3
|
|
|
$
|
8.5
|
|
Provided by/(Used in):
|
2017
|
|
2016
|
||||
Operating activities
|
$
|
7.8
|
|
|
$
|
5.6
|
|
Investing activities
|
$
|
(0.7
|
)
|
|
$
|
(1.4
|
)
|
Financing activities
|
$
|
(1.4
|
)
|
|
$
|
(0.7
|
)
|
Commitments and obligations
|
Remaining 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Capital lease obligations
|
$
|
218
|
|
|
$
|
236
|
|
|
$
|
78
|
|
|
$
|
40
|
|
|
$
|
28
|
|
|
$
|
7
|
|
|
$
|
607
|
|
Purchase obligations
(1)(2)
|
2,670
|
|
|
5,675
|
|
|
5,675
|
|
|
4,675
|
|
|
—
|
|
|
—
|
|
|
18,695
|
|
|||||||
Operating leases
|
1,680
|
|
|
1,809
|
|
|
876
|
|
|
141
|
|
|
20
|
|
|
13
|
|
|
4,539
|
|
|||||||
Note payable and other financing arrangements
|
518
|
|
|
641
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,159
|
|
|||||||
Employment agreements
|
495
|
|
|
495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
990
|
|
|||||||
Royalty agreement
|
30
|
|
|
59
|
|
|
59
|
|
|
59
|
|
|
6
|
|
|
—
|
|
|
213
|
|
|||||||
Tax liability
(3)
|
605
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
766
|
|
|||||||
Other obligations
(4)
|
350
|
|
|
23
|
|
|
141
|
|
|
87
|
|
|
38
|
|
|
967
|
|
|
1,606
|
|
|||||||
Total commitments and obligations
|
$
|
6,566
|
|
|
$
|
8,938
|
|
|
$
|
6,829
|
|
|
$
|
5,002
|
|
|
$
|
92
|
|
|
$
|
1,148
|
|
|
$
|
28,575
|
|
|
Estimated useful life
|
|
Net carrying value at June 30, 2017
|
Office furniture and equipment
|
5 to 7 years
|
|
$0.6 million
|
Computer hardware and software
|
3 to 5 years
|
|
1.7 million
|
Leasehold improvements
(1)
|
2 to 10 years
|
|
0.9 million
|
Total net carrying value at June 30, 2017
|
|
|
$3.2 million
|
Loyalty program
|
(in thousands)
|
|
|
Loyalty deferred revenue as of January 1, 2016
|
$
|
8,073
|
|
Loyalty points forfeited or expired
|
(6,963
|
)
|
|
Loyalty points used
|
(15,451
|
)
|
|
Loyalty points vested
|
20,085
|
|
|
Loyalty points unvested
|
1,289
|
|
|
Loyalty deferred revenue as of December 31, 2016
|
$
|
7,033
|
|
Loyalty deferred revenue as of January 1, 2017
|
$
|
7,033
|
|
Loyalty points forfeited or expired
|
(3,370
|
)
|
|
Loyalty points used
|
(6,957
|
)
|
|
Loyalty points vested
|
7,585
|
|
|
Loyalty points unvested
|
1,916
|
|
|
Loyalty deferred revenue as of June 30, 2017
|
$
|
6,207
|
|
•
|
Retail Customer Product Return Policy.
This policy allows a retail customer to return any of our products to the original associate who sold the product and receive a full cash refund from the associate for the first 180 days following the product’s purchase if located in the United States and Canada, and for the first 90 days following the product’s purchase in other countries where we sell our products. The associate may then return or exchange the product based on the associate product return policy.
|
•
|
Associate and Member Product Return Policy.
This policy allows the associate or member to return an order within one year of the purchase date upon terminating his/her account. If an associate or member returns a product unopened and in good condition, he/she may receive a full refund minus a 10% restocking fee. We may also allow the associate or member to receive a full satisfaction guarantee refund if they have tried the product and are not satisfied for any reason, excluding promotional materials. This satisfaction guarantee refund applies in the United States and Canada, only for the first 180 days following the product’s purchase, and applies in other countries where we sell our products for the first 90 days following the product’s purchase; however, any commissions earned by an associate will be deducted from the refund. If we discover abuse of the refund policy, we may terminate the associate’s or member’s account.
|
|
June
2017
Grant
|
||
Estimated fair value per share of options granted:
|
$
|
5.87
|
|
Assumptions:
|
|
|
|
Annualized dividend yield
|
3.5
|
%
|
|
Risk-free rate of return
|
1.7
|
%
|
|
Common stock price volatility
|
64.4
|
%
|
|
Expected average life of stock options (in years)
|
4.5
|
|
|
|
Six months ended June 30, 2017
|
|
As of June 30, 2017
|
||||||||
Country (foreign currency name)
|
|
Low
|
|
High
|
|
Average
|
|
Spot
|
||||
Australia (Australian Dollar)
|
|
0.72066
|
|
|
0.77228
|
|
|
0.75408
|
|
|
0.76640
|
|
Canada (Canadian Dollar)
|
|
0.72759
|
|
|
0.76839
|
|
|
0.74946
|
|
|
0.76785
|
|
China (Renminbi)
|
|
0.14383
|
|
|
0.14742
|
|
|
0.14545
|
|
|
0.14742
|
|
Colombia (Peso)
|
|
0.00033
|
|
|
0.00036
|
|
|
0.00034
|
|
|
0.00033
|
|
Czech Republic (Koruna)
|
|
0.03863
|
|
|
0.04345
|
|
|
0.04044
|
|
|
0.04345
|
|
Denmark (Kroner)
|
|
0.14032
|
|
|
0.15343
|
|
|
0.14556
|
|
|
0.15343
|
|
Hong Kong (Hong Kong Dollar)
|
|
0.12813
|
|
|
0.12896
|
|
|
0.12865
|
|
|
0.12813
|
|
Japan (Yen)
|
|
0.00850
|
|
|
0.00922
|
|
|
0.00890
|
|
|
0.00890
|
|
Mexico (Peso)
|
|
0.04562
|
|
|
0.05593
|
|
|
0.05162
|
|
|
0.05584
|
|
New Zealand (New Zealand Dollar)
|
|
0.68445
|
|
|
0.73257
|
|
|
0.70789
|
|
|
0.73040
|
|
Norway (Krone)
|
|
0.11542
|
|
|
0.12213
|
|
|
0.11803
|
|
|
0.11902
|
|
Republic of Korea (Won)
|
|
0.00083
|
|
|
0.00091
|
|
|
0.00088
|
|
|
0.00088
|
|
Singapore (Singapore Dollar)
|
|
0.69018
|
|
|
0.72560
|
|
|
0.71207
|
|
|
0.72447
|
|
South Africa (Rand)
|
|
0.07210
|
|
|
0.08044
|
|
|
0.07580
|
|
|
0.07717
|
|
Sweden (Krona)
|
|
0.10943
|
|
|
0.11752
|
|
|
0.11283
|
|
|
0.11752
|
|
Switzerland (Franc)
|
|
0.97481
|
|
|
1.04402
|
|
|
1.00554
|
|
|
1.04402
|
|
Taiwan (New Taiwan Dollar)
|
|
0.03084
|
|
|
0.03401
|
|
|
0.03264
|
|
|
0.03289
|
|
United Kingdom (British Pound)
|
|
1.20519
|
|
|
1.30427
|
|
|
1.25854
|
|
|
1.29707
|
|
Various countries
(1)
(Euro)
|
|
1.04322
|
|
|
1.14106
|
|
|
1.08243
|
|
|
1.14106
|
|
Period
|
|
Total number
of shares
purchased
|
|
Average
price
paid per share
|
|
Total number of shares purchased as part of publicly announced programs
(a)
|
|
Dollar value of
shares that may yet
be purchased
(b)
(in thousands)
|
||||||
April 1, 2017 - April 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
May 1, 2017 - May 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
June 1, 2017 - June 30, 2017
|
|
4,486
|
|
|
$
|
14.28
|
|
|
4,486
|
|
|
$
|
19,665
|
|
Total
|
|
4,486
|
|
|
|
|
|
4,486
|
|
|
|
|
|
MANNATECH, INCORPORATED
|
|
|
|
|
Dated: August 8, 2017
|
By:
|
/s/ Alfredo Bala
|
|
|
Alfredo Bala
|
|
|
Chief Executive Officer
|
|
|
(principal executive officer)
|
Dated: August 8, 2017
|
By:
|
/s/ David A. Johnson
|
|
|
David A. Johnson
|
|
|
Chief Financial Officer
|
|
|
(principal financial officer)
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit (s)
|
|
Filing Date
|
|
Amended and Restated Articles of Incorporation of
Mannatech, dated May 19, 1998.
|
|
S-1
|
|
333-63133
|
|
3.1
|
|
October 28, 1998
|
|
|
Certificate of Amendment to the Amended and Restated Articles of Incorporation of Mannatech, dated January 13, 2012.
|
|
8-K
|
|
000-24657
|
|
3.1
|
|
January 17, 2012
|
|
|
Fifth Amended and Restated Bylaws of Mannatech, dated August 25, 2014.
|
|
8-K
|
|
000-24657
|
|
3.1
|
|
August 27, 2014
|
|
|
Specimen Certificate representing Mannatech’s common stock, par value $0.0001 per share.
|
|
S-1
|
|
333-63133
|
|
4.1
|
|
October 28, 1998
|
|
10.1
|
|
Mannatech, Incorporated 2017 Stock Incentive Plan
|
|
*
|
|
*
|
|
*
|
|
*
|
10.2
|
|
Form of Performance Stock Unit Award Agreement
|
|
*
|
|
*
|
|
*
|
|
*
|
10.3
|
|
Form of Stock Option Award Agreement
|
|
*
|
|
*
|
|
*
|
|
*
|
10.4
|
|
Form of Restricted Stock Unit Award Agreement
|
|
*
|
|
*
|
|
*
|
|
*
|
10.5
|
|
Form of Stock Appreciation Rights Award Agreement
|
|
*
|
|
*
|
|
*
|
|
*
|
10.6
|
|
Form of Restricted Stock Award Agreement
|
|
*
|
|
*
|
|
*
|
|
*
|
10.7
|
|
Form of Performance Stock Award Agreement
|
|
*
|
|
*
|
|
*
|
|
*
|
31.1*
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer of Mannatech.
|
|
*
|
|
*
|
|
*
|
|
*
|
31.2*
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, of the Chief Financial Officer of Mannatech.
|
|
*
|
|
*
|
|
*
|
|
*
|
32.1*
|
|
Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, of the Chief Executive Officer of Mannatech.
|
|
*
|
|
*
|
|
*
|
|
*
|
32.2*
|
|
Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, of the Chief Financial Officer of Mannatech.
|
|
*
|
|
*
|
|
*
|
|
*
|
101.INS*
|
|
XBRL Instance Document
|
|
*
|
|
*
|
|
*
|
|
*
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
*
|
|
*
|
|
*
|
|
*
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
*
|
|
*
|
|
*
|
|
*
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
*
|
|
*
|
|
*
|
|
*
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
|
*
|
|
*
|
|
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101.DEF*
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XBRL Taxonomy Extension Definition Linkbase Document
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Filed herewith.
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1.
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I have reviewed this quarterly report on Form 10-Q of Mannatech, Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Alfredo Bala
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Alfredo Bala
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Chief Executive Officer
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(principal executive officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Mannatech, Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ David A. Johnson
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David A. Johnson
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Chief Financial Officer
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(principal financial officer)
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Alfredo Bala
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Alfredo Bala
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Chief Executive Officer
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(principal executive officer)
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ David A. Johnson
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David A. Johnson
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Chief Financial Officer
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(principal financial officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Mannatech, Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Alfredo Bala
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Alfredo Bala
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Chief Executive Officer
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(principal executive officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Mannatech, Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
.
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/s/ David A. Johnson
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David A. Johnson
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Chief Financial Officer
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(principal financial officer)
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Alfredo Bala
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Alfredo Bala
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Chief Executive Officer
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(principal executive officer)
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|
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ David A. Johnson
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David A. Johnson
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Chief Financial Officer
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(principal financial officer)
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