4 unchanged sentences
During the quarter ended December 31, 2020 , there were no changes in our internal control over our financial reporting that we believe materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: We have not experienced any material changes to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic.
+Added: We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.
REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
18 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: Consolidated Balance Sheets as of December 31, 2019 and 2018
−Removed: Consolidated Statements of Operations for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018
+Added: Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 4
+Added: Consolidated Statements of Operations for the years ended December 31, 2020 and 2019 F- 5
+Added: Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020 and 2019 F- 5
+Added: Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020 and 2019 F- 6
+Added: Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019 F- 7
Notes to Consolidated Financial Statements
6 unchanged sentences
Incorporated by Reference
−Removed: Exhibit Description
+Added: Number Exhibit Description Form File No.
+Added: Exhibit (s) Filing Date
3.1 Amended and Restated Articles of Incorporation of Mannatech, dated May 19, 1998.
−Removed: October 28, 1998
+Added: S-1 333-63133 3.1 October 28, 1998
3.2 Amendment to the Amended and Restated Articles of Incorporation of Mannatech, dated January 13, 2012.
−Removed: January 17, 2012
+Added: 8-K 000-24657 3.1 January 17, 2012
3.3 Fifth Amended and Restated Bylaws of Mannatech, effective August 25, 2014.
−Removed: August 27, 2014
+Added: 8-K 000-24657 3.1 August 27, 2014
4.1 Specimen Certificate representing Mannatech’s common stock, par value $0.0001 per share.
−Removed: October 28, 1998
+Added: S-1 333-63133 4.1 October 28, 1998
4.2 Description of Securities
+Added: 10-K 000-24657 4.2 March 26, 2020
10.1† Mannatech, Incorporated 2017 Stock Incentive Plan
−Removed: August 22, 2019
+Added: S-8 333-233418 4.1 August 22, 2019
10.2† First Amendment to Mannatech, Incorporated 2017 Stock Incentive Plan
−Removed: August 7, 2019
+Added: 10-Q 000-24657 10.1 August 7, 2019
10.3† Form of Performance Stock Unit Award Agreement
−Removed: August 8, 2017
+Added: 10-Q 000-24657 10.2 August 8, 2017
10.4† Form of Stock Option Award Agreement
−Removed: August 8, 2017
+Added: 10-Q 000-24657 10.3 August 8, 2017
10.5† Form of Restricted Stock Unit Award Agreement
−Removed: August 8, 2017
+Added: 10-Q 000-24657 10.4 August 8, 2017
10.6† Form of Stock Appreciation Rights Award Agreement
−Removed: August 8, 2017
+Added: 10-Q 000-24657 10.5 August 8, 2017
10.7† Form of Restricted Stock Award Agreement
−Removed: August 8, 2017
+Added: 10-Q 000-24657 10.6 August 8, 2017
10.8† Form of Performance Stock Award Agreement
−Removed: August 8, 2017
+Added: 10-Q 000-24657 10.7 August 8, 2017
10.9† Amended and Restated 1998 Incentive Stock Option Plan, dated August 7, 2004.
−Removed: March 15, 2004
+Added: 10-K 000-24657 10.1 March 15, 2004
10.10† Amended and Restated 2000 Option Plan, dated August 7, 2004.
−Removed: March 15, 2004
+Added: 10-K 000-24657 10.1 March 15, 2004
10.11 Form of Indemnification Agreement between Mannatech and each member of the Board of Directors of Mannatech Korea Ltd., dated March 3, 2004.
−Removed: August 9, 2004
+Added: 10-Q 000-24657 10.2 August 9, 2004
10.12 Form of Indemnification Agreement between Mannatech and each of the following directors:
3 unchanged sentences
Jobe, and Robert A.
−Removed: November 4, 2010
+Added: 10-Q 000-24657 10.4 November 4, 2010
10.13 Commercial Lease Agreement between Mannatech and SCG Lakeside Commerce Center, L.P., dated October 18, 2017.
−Removed: March 26, 2018
+Added: 10-K 000-24657 10.12 March 26, 2018
10.14 Employment Agreement between Alfredo Bala and Mannatech, effective October 1, 2007, dated September 18, 2007.
−Removed: September 24, 2007
+Added: 8-K 000-24657 10.1 September 24, 2007
10.15 Executive Service Agreement between Mannatech Korea, Ltd.
and Yong Jae (Patrick) Park, dated October 1, 2009.
+Added: 10-Q 000-24657 10.1 May 12, 2015
10.16 Supply Agreement between Natural Aloe de Costa Rica, S.A.
and Mannatech, dated as of November 22, 2016 (portions of this exhibit were omitted pursuant to a confidential treatment request submitted pursuant to Rule 24b-2 of the Exchange Act)
−Removed: March 14, 2017
+Added: 10-K 00-24657 10.61 March 14, 2017
14.1 Code of Ethics.
−Removed: March 16, 2007
+Added: 10-K 000-24657 14.1 March 16, 2007
21* List of Subsidiaries.
2 unchanged sentences
Incorporated by Reference
−Removed: Exhibit Description
+Added: Number Exhibit Description Form File No.
+Added: Exhibit (s) Filing Date
31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer of Mannatech.
3 unchanged sentences
99.1* Financial Statement Schedule Regarding Valuation and Qualifying Accounts.
−Removed: XBRL Instance Document
−Removed: XBRL Taxonomy Extension Schema Document
−Removed: XBRL Taxonomy Extension Calculation Linkbase Document
−Removed: XBRL Taxonomy Extension Label Linkbase Document
−Removed: XBRL Taxonomy Extension Presentation Linkbase Document
−Removed: XBRL Taxonomy Extension Definition Linkbase Document
+Added: 101.INS* XBRL Instance Document * * * *
+Added: 101.SCH* XBRL Taxonomy Extension Schema Document * * * *
+Added: 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document * * * *
+Added: 101.LAB* XBRL Taxonomy Extension Label Linkbase Document * * * *
+Added: 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document * * * *
+Added: 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document * * * *
* Filed herewith.
2 unchanged sentences
MANNATECH, INCORPORATED
−Removed: March 26, 2020
+Added: March 19, 2021 By:
/s/ Alfredo Bala
1 unchanged sentence
(principal executive officer)
−Removed: March 26, 2020
+Added: March 19, 2021 By:
Chief Financial Officer
5 unchanged sentences
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated:
−Removed: /s/ Alfredo Bala
−Removed: Chief Executive Officer
−Removed: (principal executive officer)
−Removed: March 26, 2020
−Removed: Chief Financial Officer
−Removed: (principal financial officer)
−Removed: March 26, 2020
−Removed: Stanley Fredrick
−Removed: Chairman of the Board
−Removed: March 26, 2020
+Added: Signature Title Date
+Added: /s/ Alfredo Bala Chief Executive Officer
+Added: (principal executive officer) March 19, 2021
+Added: Johnson Chief Financial Officer
+Added: (principal financial officer) March 19, 2021
+Added: Stanley Fredrick Chairman of the Board March 19, 2021
Stanley Fredrick
/s/ Robert A.
−Removed: March 26, 2020
−Removed: /s/ Kevin Andrew Robbins
−Removed: March 26, 2020
+Added: Toth Director March 19, 2021
+Added: /s/ Kevin Andrew Robbins Director March 19, 2021
Kevin Andrew Robbins
−Removed: March 26, 2020
−Removed: March 26, 2020
−Removed: /s/ Tyler Rameson
−Removed: March 26, 2020
+Added: Jobe Director March 19, 2021
+Added: Schrier Director March 19, 2021
+Added: /s/ Tyler Rameson Director March 19, 2021
Tyler Rameson
1 unchanged sentence
Report of Independent Registered Public Accounting Firm
−Removed: Consolidated Balance Sheets as of December 31, 2019 and 2018
−Removed: Consolidated Statements of Operations for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018
+Added: Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 4
+Added: Consolidated Statements of Operations for the years ended December 31, 2020 and 2019 F- 5
+Added: Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020 and 2019 F- 5
+Added: Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020 and 2019 F- 6
+Added: Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019 F- 7
Notes to Consolidated Financial Statements
4 unchanged sentences
Opinion on the Consolidated Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Mannatech, Incorporated (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for the years then ended, and the related notes and financial statement schedule listed in the index appearing under item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
+Added: We have audited the accompanying consolidated balance sheets of Mannatech, Incorporated (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended , in conformity with accounting principles generally accepted in the United States of America.
−Removed: Change in Accounting Principle
−Removed: As discussed on Notes 1 and 5 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases .
Basis for Opinion
12 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Transfer Pricing
+Added: As described in Note 15 to the consolidated financial statements, the Company sells products in twenty-five countries around the world, and a substantial majority of the Company’s consolidated net sales in 2020, were generated outside of the United States.
+Added: As described in Note 7 to the consolidated financial statements, $4.9 million of the Company’s $5.7 million in consolidated income before taxes is generated in the United States.
+Added: This is largely a function of the Company’s transfer pricing policies, which govern the allocation of taxable income among the Company’s various tax jurisdictions.
+Added: We identified the Company’s determination of appropriate transfer pricing policies as a critical audit matter.
+Added: As the tax regulations that exist over transfer pricing are subjective and vary by jurisdiction, auditing management’s transfer pricing studies and transfer pricing policies was especially challenging and required significant auditor judgement, including the involvement of tax professionals with specialized knowledge and skill.
+Added: The primary procedures we performed to address this critical audit matter included:
+Added: • Utilizing personnel with specialized knowledge and skill in transfer pricing regulations to assist in evaluating (i) the reasonableness of the Company’s transfer pricing policies, based on comparisons to comparable companies and precedents set by the various taxing authorities that govern the jurisdictions in which the Company operates and (ii) jurisdictional profit margins to ensure that the Company’s intercompany transactions and other income allocation methodologies are appropriate and comply with the Company’s transfer pricing policies.
/s/ BDO USA, LLP
5 unchanged sentences
(in thousands, except share information)
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
Cash and cash equivalents $ 22,207 $ 24,762
9 unchanged sentences
Long-term restricted cash 4,346 5,295
+Added: Other assets 11,977 9,592
Deferred tax assets, net 1,178 881
+Added: Total assets $ 65,336 $ 62,923
LIABILITIES AND SHAREHOLDERS’ EQUITY
17 unchanged sentences
Additional paid-in capital 33,795 34,143
−Removed: Accumulated deficits
+Added: Retained Earnings (accumulated deficit) 2,213 ( 690 )
Accumulated other comprehensive income 5,150 3,757
7 unchanged sentences
For the years ended December 31,
+Added: Net sales $ 151,407 $ 157,728
Cost of sales 35,505 31,550
+Added: Gross profit 115,902 126,178
Operating expenses:
4 unchanged sentences
Total operating expenses 111,411 119,745
−Removed: Income (loss) from operations
+Added: Income from operations 4,491 6,433
Interest income (expense) 83 ( 16 )
1 unchanged sentence
Income before income taxes 5,725 5,736
−Removed: Income tax provision
−Removed: Net income (loss)
−Removed: Income (loss) per common share:
+Added: Income tax benefit (provision) 536 ( 2,447 )
+Added: Net income $ 6,261 $ 3,289
+Added: Income per common share:
+Added: Basic $ 2.80 $ 1.38
+Added: Diluted $ 2.77 $ 1.35
Weighted-average common shares outstanding:
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
+Added: Basic 2,235 2,391
+Added: Diluted 2,264 2,441
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
−Removed: Net income (loss)
−Removed: Foreign currency translations loss
+Added: Net income $ 6,261 $ 3,289
+Added: Foreign currency translations gain (loss) 1,358 ( 607 )
Pension obligations, net of tax provision of $19 and $14 in 2020 and 2019, respectively
−Removed: Comprehensive income (loss)
+Added: Comprehensive income $ 7,654 $ 2,709
See accompanying notes to consolidated financial statements.
2 unchanged sentences
(in thousands)
−Removed: Accumulated deficit
+Added: stock Additional
+Added: capital Retained earnings (accumulated deficit)
comprehensive
+Added: income Treasury
shareholders’
Balance at December 31, 2018 $ — $ 33,939 $ ( 2,782 ) $ 4,337 $ ( 10,170 ) $ 25,324
+Added: Net Income — — 3,289 — — 3,289
Payment of cash dividends — — ( 1,200 ) — — ( 1,200 )
4 unchanged sentences
Repurchase of common stock — — — — ( 305 ) ( 305 )
+Added: Other — — 3 — — 3
Foreign currency translation — — — ( 607 ) — ( 607 )
1 unchanged sentence
Balance at December 31, 2019 $ — $ 34,143 $ ( 690 ) $ 3,757 $ ( 9,935 ) $ 27,275
+Added: Net Income — — 6,261 — — 6,261
Payment of cash dividends — — ( 3,358 ) — — ( 3,358 )
1 unchanged sentence
Issuance of unrestricted shares — ( 157 ) — — 367 210
−Removed: Release of restricted stock
Repurchase of common stock — — — — ( 6,256 ) ( 6,256 )
1 unchanged sentence
Foreign currency translation — — — 1,358 — 1,358
−Removed: Pension obligations, net of tax of $14
+Added: Pension obligations, net of tax o f $19
+Added: — — — 35 — 35
Balance at December 31, 2020 $ — $ 33,795 $ 2,213 $ 5,150 $ ( 15,186 ) $ 25,972
5 unchanged sentences
CASH FLOWS FROM OPERATING ACTIVITIES:
−Removed: Net income (loss)
−Removed: Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities :
+Added: Net income $ 6,261 $ 3,289
+Added: Adjustments to reconcile net income (loss) to net cash provided by operating activities :
Depreciation and amortization 1,990 2,088
2 unchanged sentences
Provision for doubtful accounts 208 82
−Removed: Loss on disposal of assets
+Added: (Gain) loss on disposal of assets ( 5 ) 121
Stock-based compensation expense 334 734
3 unchanged sentences
Income tax receivable ( 788 ) 71
+Added: Inventories ( 2,664 ) 2,051
Prepaid expenses and other current assets ( 738 ) 1,705
Deferred commissions ( 585 ) 691
+Added: Other Assets ( 1,139 ) ( 130 )
Accounts payable 1,271 ( 3,198 )
−Removed: Accrued expenses and other liabilities
+Added: Accrued expenses and other long-term liabilities ( 2,383 ) ( 1,646 )
Taxes payable ( 787 ) ( 468 )
1 unchanged sentence
Deferred revenue 1,056 ( 858 )
−Removed: Net cash provided by (used in) operating activities
+Added: Net cash provided by operating activities 6,030 4,917
CASH FLOWS FROM INVESTING ACTIVITIES:
3 unchanged sentences
CASH FLOWS FROM FINANCING ACTIVITIES:
−Removed: Proceeds from stock options exercised
Repurchase of common stock ( 5,933 ) ( 294 )
Payment of cash dividends ( 3,358 ) ( 1,200 )
+Added: Proceeds of Paycheck Protection Program Note Payable 2,244 —
+Added: Repayment of Paycheck Protection Program Note Payable ( 2,244 ) —
Repayment of finance lease obligations and other long term liabilities ( 628 ) ( 1,220 )
1 unchanged sentence
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash 1,333 ( 567 )
−Removed: Net increase (decrease) in cash, cash equivalents and restricted cash
+Added: Net (decrease) increase in cash, cash equivalents and restricted cash ( 3,503 ) 416
Cash, cash equivalents and restricted cash at the beginning of the year 31,000 30,584
6 unchanged sentences
Accrued asset purchases $ 709 $ 478
−Removed: Assets acquired through other financing arrangements
Operating lease right of use assets recorded upon adoption of ASC 842 $ — $ 4,638
9 unchanged sentences
We currently sell our products into three regions:
−Removed: (i) the Americas (the United States, Canada, Colombia and Mexico);
+Added: (i) the Americas (the United States, Canada and Mexico);
(ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom);
and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan, Hong Kong, and China).
−Removed: Associates and now preferred customers purchase the Company’s products at published wholesale prices.
+Added: Active business building associates ("independent associates" or "associates" or "distributors") and preferred customers purchase the Company’s products at published wholesale prices.
The Company cannot distinguish products sold for personal use from other sales, when sold to associates, because it is not involved with the products after delivery, other than usual and customary product warranties and returns.
4 unchanged sentences
Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China.
+Added: In March 2020, the World Health Organization (“WHO”) declared the outbreak of COVID-19 as a pandemic, which has spread throughout our international regions and the United States.
+Added: We closed some offices and have worked remotely.
+Added: The Company depends on an independent sales force of distributors to market and sell its products to consumers.
+Added: Developments such as social distancing and shelter-in-place directives have impacted and may continue to impact their ability to engage with potential and existing customers.
+Added: The adverse economic effects of COVID-19 may also materially decrease demand for the Company’s products based on changes in consumer behavior or the restrictions in place by governments trying to curb the outbreak.
+Added: For example, the Company has rescheduled corporate sponsored events, and in some cases, our associates have canceled sales meetings.
+Added: For some products, the Company experienced shortages of raw materials, packaging supplies and ingredients.
+Added: We have experienced challenges in getting these materials and ingredients to our contract manufacturers and finished products to our distribution centers resulting from reductions in global transportation capacity.
+Added: Despite the impact on the global supply chain, the Company has overcome obstacles in shipping to our customers.
+Added: While the conditions described above are expected to be temporary, prolonged workforce disruptions, continued disruption in our supply chain and potential decreases in consumer demands negatively impacted our sales in fiscal year 2020 and may continue to negatively impact sales in fiscal year 2021 as well as the Company’s overall liquidity.
+Added: We are actively monitoring the global situation with a focus on our financial condition, liquidity, operations, suppliers, industry, and workforce.
Principles of Consolidation
11 unchanged sentences
As a result, nonmonetary assets and liabilities are remeasured at their approximate historical rates, monetary assets and liabilities are remeasured at exchange rates in effect at the end of the year, and revenues and expenses are remeasured at weighted-average exchange rates for the year.
−Removed: The local currency is the functional currency of our subsidiaries in Columbia, Japan, Republic of Korea, Taiwan, Norway, Denmark, Sweden, Mexico and China.
+Added: The local currency is the functional currency of our subsidiaries in Japan, Republic of Korea, Taiwan, Norway, Denmark, Sweden, Mexico and China.
These subsidiaries’ assets and liabilities are translated into United States dollars at exchange rates existing at the balance sheet dates, revenues and expenses are translated at weighted-average exchange rates, and shareholders’ equity and intercompany balances are translated at historical exchange rates.
The foreign currency translation adjustment is recorded as a separate component of shareholders’ equity and is included in accumulated other comprehensive income.
−Removed: Transaction losses totaled approximately $0.7 million for the year ended December 31, 2019 and transaction gains totaled approximately $0.3 million for the year ended December 31, 2018 , and are included in other expense, net in the Company’s consolidated statements of operations.
+Added: Transaction gains totaled approximately $ 1.1 million for the year ended December 31, 2020 and transaction losses totaled approximately $ 0.7 million for the year ended December 31, 2019, and are included in other income (expense), net in the Company’s consolidated statements of operations.
Cash and Cash Equivalents
14 unchanged sentences
The Company classifies the restricted cash held in Korea and Australia as long-term since it relates to assets and services contracted for longer than one year.
−Removed: The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's consolidated balance sheets to the total amount presented in the consolidated statement of cash flows ( in thousands ):
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the Company's consolidated balance sheets to the total amount presented in the consolidated statement of cash flows ( in thousands ):
+Added: December 31, 2020 December 31, 2019
Cash and cash equivalents at beginning of period $ 24,762 $ 21,845
18 unchanged sentences
Also included in the balances at December 31, 2020 and 2019 were $ 1.1 million and $ 0.7 million for other prepaid deposits, respectively.
−Removed: At December 31, 2019 the balance in prepaid inventory was $0.7 million .
+Added: Also included in the balances at December 31, 2020 and 2019 were $ 0.8 million and $ 0.7 million in prepaid inventory, respectively.
Property and Equipment
5 unchanged sentences
Estimated useful life
−Removed: Office furniture and equipment
−Removed: Computer hardware and software
−Removed: Leasehold improvements (1)
−Removed: 2 to 10 years
−Removed: (1) The Company amortizes leasehold improvements over the shorter of the useful estimated life of the leased asset or the lease term.
+Added: Office furniture and equipment 5 to 7 years
+Added: Computer hardware and software 3 to 5 years
+Added: Automobiles 3 to 5 years
+Added: Leasehold improvements 2 to 10 years
Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable.
2 unchanged sentences
At December 31, 2020 and 2019, other assets were $ 12.0 million and $ 9.6 million, respectively.
−Removed: Included in the December 31, 2019 and 2018 balances were deposits for building leases in various locations of $2.2 million and $2.0 million , respectively.
+Added: The December 31, 2020 and 2019 balances include operating lease right of use assets of $ 6.9 million and $ 5.6 million, respectively.
+Added: See Note 5, Leases for more information.
+Added: Included in each of the December 31, 2020 and 2019 balances were deposits for building leases in various locations of $ 2.2 million.
Also included in the December 31, 2020 and 2019 balances were $ 2.6 million and $ 1.6 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages.
Other assets at each of December 31, 2020 and 2019 also include $ 0.2 million of indefinite lived intangible assets relating to the Manapol ® powder trademark.
−Removed: The December 31, 2019 balance also includes $5.6 million of operating lease right-of-use assets.
−Removed: See Note 5, Leases for more information.
Notes Payable
3 unchanged sentences
At December 31, 2019, the current portion was $ 0.7 million and the long-term portion was $ 0.4 million.
+Added: On April 10, 2020, the Company received loan proceeds of $ 2.2 million (the “Loan”) under the Paycheck Protection Program (“PPP”).
+Added: The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted on March 27, 2020, and is administered by the U.S.
+Added: Small Business Administration (the “SBA”).
+Added: The Loan to the Company was made through JPMorgan Chase Bank, N.
+Added: A., the Company’s existing banker (the “Lender”).
+Added: At the time the Company applied for and received the Loan, the Company planned to use the Loan proceeds for covered payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.
+Added: After the Company received the proceeds of the Loan, the SBA provided subsequent guidance interpreting the PPP.
+Added: Based on such subsequent guidance, the Company made the determination to repay the Loan in full, which it did on April 30, 2020.
Other Long-Term Liabilities
Other long-term liabilities were $ 7.2 million and $ 6.2 million for the years ending December 31, 2020 and 2019, respectively.
−Removed: At December 31, 2018, we recorded $ 1.3 million of lease incentive obligation for leasehold improvements at our corporate headquarters.
+Added: At December 31, 2020 and 2019, we recorded long-term lease liabilities related to operating leases of $ 6.1 million and $ 5.3 million, respectively.
+Added: See Note 5, Leases for more information.
At each of December 31, 2020 and 2019, we recorded $ 0.2 million, respectively, in other long-term liabilities related to uncertain income tax positions (see Note 7, Income Taxes ).
Certain operating leases for the Company’s regional office facilities contain a restoration clause that requires the Company to restore the premises to its original condition.
−Removed: At December 31, 2019 and 2018 , accrued restoration costs related to these leases amounted to $0.3 million and $0.4 million , respectively.
+Added: At each of December 31, 2020 and 2019, accrued restoration costs related to these leases amounted to $ 0.3 million.
At December 31, 2020 and 2019, government mandated severance accruals in certain international offices amounted to $ 0.5 million and $ 0.4 million, respectively.
1 unchanged sentence
defined benefit plan for its Japan operations of $ 0.4 million and $ 0.3 million as of December 31, 2020 and 2019, respectively (See Note 9, Employee Benefit Plans ).
−Removed: The December 31, 2019 balance also includes $5.3 million of long-term operating lease right-of-use obligations.
−Removed: See Note 5, Leases for more information.
Revenue Recognition
−Removed: The Company’s revenue is derived from sales of individual products and associate fees or, in certain geographic markets,
−Removed: starter and renewal packs.
+Added: The Company’s revenue is derived from sales of individual products and associate fees or, in certain geographic markets, starter packs.
Substantially all of the Company’s product sales are made at published wholesale prices to associates and preferred customers.
3 unchanged sentences
Orders placed by associates or preferred customers constitute our contracts.
−Removed: Product sales placed in the form of an automatic order contain two performance obligations - a) the sale of the product and b) the loyalty program.
+Added: Product sales placed in the form of an automatic order contain two performance obligations:
+Added: (a) the sale of the product and (b) the loyalty program.
For these contracts, the Company accounts for each of these obligations separately as they are each distinct.
2 unchanged sentences
The Company provides associates with access to a complimentary three-month package for the Success Tracker TM and Mannatech+ online business tools with the first payment of an associate fee.
−Removed: The first payment of an associate fee contains three performance obligations a) the associate fee, whereby the Company provides an associate with the right to earn commissions, bonuses and incentives for a year, b) three months of complimentary access to utilize the Success Tracker™ online tool and c) three months of complimentary access to utilize the Mannatech+ online business tool.
+Added: The first payment of an associate fee contains three performance obligations:
+Added: (a) the associate fee, whereby the Company provides an associate with the right to earn commissions, bonuses and incentives for a year, (b) three months of complimentary access to utilize the Success Tracker™ online tool and (c) three months of complimentary access to utilize the Mannatech+ online business tool.
The transaction price is allocated between the three performance obligations on a relative standalone selling price basis.
2 unchanged sentences
Our sales mix for the years ended December 31, was as follows (in millions, except percentages) :
+Added: 2020 Percentage 2019 Percentage
Consolidated product sales $ 146.2 96.5 % $ 154.6 98.0 %
−Removed: Consolidated pack sales and associate fees (a)
+Added: Consolidated pack sales and associate fees 4.2 2.8 % 2.3 1.5 %
Consolidated other 1.0 0.7 % 0.8 0.5 %
Total consolidated net sales $ 151.4 100.0 % $ 157.7 100.0 %
−Removed: Revenues by reporting segment are presented in Note 15 of our consolidated financial statements.
−Removed: We believe that the disaggregation of our revenues as reflected above, coupled with further discussion below, and the reporting segment in Note 15, depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors.
+Added: Revenues by reporting segment are presented in Note 15, Segment Information of our consolidated financial statements.
+Added: We believe that the disaggregation of our revenues as reflected above, coupled with further discussion below, and the reporting segment in Note 15, Segment Information depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors.
Deferred Commissions
17 unchanged sentences
The deferred revenue associated with the loyalty program at December 31, 2020 and December 31, 2019 was $ 4.5 million and $ 3.1 million, as follows:
−Removed: Loyalty program
−Removed: (in thousands)
+Added: Loyalty program (in thousands)
Loyalty deferred revenue as of January 1, 2019 $ 4,231
38 unchanged sentences
The Company expenses advertising and promotions in selling and administrative expenses when incurred.
−Removed: Advertising and promotional expenses were approximately $3.5 million and $5.6 million for the years ended December 31, 2019 and 2018 , respectively.
+Added: Advertising and promotional expenses remained constant at $ 3.5 million for each of the years ended December 31, 2020 and 2019.
Educational and promotional items, called sales aids, are sold to associates to assist in their sales efforts and are included in inventories and charged to cost of sales when sold.
6 unchanged sentences
The 2017 Plan supersedes the Mannatech, Incorporated 2008 Stock Incentive Plan (as amended the "2008 Plan"), which was set to expire on February 20, 2018.
−Removed: The Board has reserved a maximum of 370,000 shares of our common stock that may be issued under the 2017 Plan (subject to adjustments for stock splits, stock dividends or other changes in corporate capitalization).
+Added: The Board has reserved a maximum of 370,000 shares of the Company's common stock that may be issued under the 2017 Plan (subject to adjustments for stock splits, stock dividends or other changes in corporate capitalization).
The 2017 Plan provides for grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock and performance stock units to our employees, board members, and consultants.
26 unchanged sentences
Concentration Risk
−Removed: A significant portion of our revenue is derived from our Ambrotose Life ® , Advanced Ambrotose ® , TruHealth ™ , Manapol ® Powder, and GI-Pro products.
+Added: A significant portion of our revenue is derived from our Ambrotose Life ® , TruHealth ™ , Advanced Ambrotose ® , Optimal Support Packets, and GI-Pro products.
A decline in sales value of such products could have a material adverse effect on our earnings, cash flows, and financial position.
Revenue from these products were as follows for the years ended December 31, 2020 and 2019 ( in thousands, except percentages ):
+Added: product % of total
+Added: net sales Sales by
+Added: product % of total
Ambrotose Life ®
+Added: $ 36,066 23.8 % $ 34,975 22.2 %
+Added: 16,263 10.7 % 16,193 14.2 %
Advanced Ambrotose ®
−Removed: Manapol ® Powder
−Removed: GI-Pro Balance
+Added: 14,662 9.7 % 22,390 10.3 %
+Added: Optimal Support Packets 7,996 5.3 % 4,110 2.6 %
+Added: GI-Pro (MicroBiome) 7,513 5.0 % 6,559 4.2 %
+Added: Total $ 82,500 54.5 % $ 84,227 53.5 %
Our business is not currently exposed to customer concentration risk given that no independent associate has ever accounted for more than 10% of our consolidated net sales.
3 unchanged sentences
During the year ended December 31, 2020 , the Company purchased finished goods from four suppliers that accounted for 56.8% of the year's cost of sales.
−Removed: During the year ended December 31, 2018 , the Company purchased finished goods from two suppliers that accounted for 72.4% of the year's cost of sales.
+Added: During the year ended December 31, 2019, the Company purchased finished goods from four suppliers that accounted for 56.0% of the year's cost of sales.
The Company maintains other supply and manufacturing agreements to minimize exposure to supplier risk.
10 unchanged sentences
Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.
−Removed: The adoption increased assets, net of incentive, by $4.7 million and liabilities by $6.1 million on our consolidated balance sheets and did not have a significant impact on our consolidated statement of operations and statements of cash flows.
+Added: The adoption increased assets, net of a lease incentive, by $4.7 million and increased liabilities by $6.1 million on our consolidated balance sheets and did not have a significant impact on our consolidated statement of operations and statements of cash flows.
These leases primarily relate to office buildings and office equipment.
15 unchanged sentences
Different components of the guidance require modified retrospective or prospective adoption.
−Removed: ASU 2019-10 deferred the effective date of ASU 2016-13 for all entities except SEC filers that are not smaller reporting companies.
+Added: ASU 2019-10 deferred the effective date of ASU 2016-13 for smaller reporting companies.
This standard will be effective for us as of January 1, 2023.
While our review is ongoing, we believe ASU 2016-13 will only have applicability to our receivables from revenue transactions.
−Removed: Under ASC 606, revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer.
+Added: Under ASC Topic 606, revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer.
At the point that trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses on trade receivables over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts.
12 unchanged sentences
The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at December 31, 2020 and 2019.
−Removed: Money Market Funds – Fidelity, US
+Added: 2020 Level 1 Level 2 Level 3 Total
Interest bearing deposits – various banks $ 6,385 $ — $ — $ 6,385
+Added: Total assets $ 6,385 $ — $ — $ 6,385
Amounts included in:
2 unchanged sentences
Long-term restricted cash 3,568 — — 3,568
+Added: Total $ 6,385 $ — $ — $ 6,385
+Added: 2019 Level 1 Level 2 Level 3 Total
+Added: Money Market Funds – Fidelity, US $ 5,000 $ — $ — $ 5,000
Interest bearing deposits – various banks $ 8,962 $ — $ — $ 8,962
+Added: Total assets $ 13,962 $ — $ — $ 13,962
Amounts included in:
2 unchanged sentences
Long-term restricted cash 4,647 — — 4,647
+Added: Total $ 13,962 $ — $ — $ 13,962
Inventories consist of raw materials, finished goods, and promotional materials.
4 unchanged sentences
Inventory reserves for obsolescence ( 471 ) ( 874 )
+Added: Total $ 12,827 $ 10,152
PROPERTY AND EQUIPMENT
4 unchanged sentences
Computer software 44,264 43,454
+Added: Automobiles 81 81
Leasehold improvements 4,508 4,230
ROU Assets- Financing 260 269
+Added: 55,708 54,551
Less accumulated depreciation and amortization ( 51,214 ) ( 49,290 )
1 unchanged sentence
Construction in progress 864 865
−Removed: Adoption of ASC Topic 842, Leases
−Removed: On January 1, 2019, the Company adopted ASC Topic 842, Leases, ("ASC Topic 842") using the modified retrospective approach using the effective date method, which was applied to historical leases that were still effective as of January 1, 2019.
−Removed: Results for reporting periods beginning January 1, 2019, are presented in accordance with ASC Topic 842, while prior period amounts are reported in accordance with historical accounting treatment under ASC Topic 840, Leases, ("ASC Topic 840").
−Removed: In accordance with the adoption of ASC Topic 842, the Company now records an operating lease right-of-use ("ROU") asset and operating lease liability on the Consolidated Balance Sheets for all operating leases with a contract term in excess of 12 months.
−Removed: Prior to the adoption of ASC Topic 842, these same leases were treated as operating leases under ASC Topic 840 and therefore were not recorded on the December 31, 2018 Consolidated Balance Sheet.
−Removed: There was no impact to retained earnings and no significant impact on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows as a result of adopting ASC Topic 842.
−Removed: Lease Recognition
−Removed: The Company has entered into contractual lease arrangements to rent office space and other office equipment from third-party lessors.
+Added: Total $ 5,358 $ 6,126
+Added: The Company leases office space and equipment from third-party lessors.
+Added: On January 1, 2019, the Company adopted ASC Topic 842, Leases, ("Topic 842") and related disclosures.
+Added: See note 5 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019.
+Added: As of December 31, 2020 , the Company had net operating lease right of use ("ROU") assets of $ 6.9 million and net finance lease right of use assets of $ 0.3 million.
+Added: At December 31, 2020 , our operating lease liabilities were $ 8.2 million and our finance lease liabilities were $ 0.2 million.
If a contract conveys the right to control the use of identified PP&E (an identified asset) for a period of time in exchange for consideration, the Company considers the contract to be a lease, or to contain a lease, in accordance with ASC Topic 842.
−Removed: Right of use (ROU) assets represent Mannatech’s right to use an underlying asset for the lease term, and lease liabilities represent Mannatech’s obligation to make future lease payments arising from the lease.
−Removed: Operating lease liabilities and financing lease liabilities are recorded at the present value of lease payments over the lease term at the commencement date.
−Removed: ROU assets are recorded on the same date at the amount of the initial liability, adjusted for incentives received, prepayments made to the lessor, and any initial direct costs incurred, as applicable.
−Removed: Leases with an initial term of 12 months or less are not recorded on the balance sheet.
−Removed: The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term.
−Removed: The Company accounts for lease components, such as office space, separately from the non-lease components, such as maintenance service fees, based on estimated costs from the vendor.
−Removed: Mannatech uses the implicit interest rate when readily determinable;
−Removed: however, most of Mannatech's lease agreements do not provide an implicit interest rate.
−Removed: As such, the Company determines the present value of future lease payments using the incremental borrowing rate available at the commencement date of the contract, or as of January 1, 2019 in the case of existing leases at adoption of ASC 842.
+Added: The Company accounts for lease components, such as office space, separately from the non-lease components, such as maintenance service fees, based on estimated costs from the lessor.
+Added: ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make future lease payments arising from the lease.
+Added: Operating lease liabilities and finance lease liabilities are recorded at the present value of lease payments over the lease term at the commencement date.
+Added: The related ROU assets are recorded on the same date at the amount of the initial liability, adjusted for incentives received, prepayments made to the lessor, and any initial direct costs incurred, as applicable.
+Added: The Company uses the discount rate implicit in the lease when it is readily determinable.
+Added: When it is not readily available, the Company discounts future lease payments using the incremental borrowing rate available to the Company as of the commencement date of the contract, or as of January 1, 2019 in the case of existing leases at the adoption of ASC 842.
The incremental borrowing rate is the rate available to the Company for a fully collateralized, fully amortizing loan with the same term as the lease.
−Removed: The operating lease ROU asset also includes any lease incentives received in the recognition of the present value of future lease payments.
−Removed: Certain of Mannatech's leases may also include escalation clauses or options to extend or terminate the lease.
−Removed: These options are included in the present value recorded for the leases when it is reasonably certain that Mannatech will exercise that option.
−Removed: None of Mannatech’s current leases contain guarantees of residual value.
−Removed: Lease expense for lease payments is recognized on a straight-line basis over the lease term.
−Removed: Lease costs represent the straight-line lease expense of ROU assets and short-term leases.
−Removed: Mannatech determines if an arrangement is a lease at inception of the contract.
−Removed: Resulting operating lease assets are recorded on the Consolidated Balance Sheets as a component of "Other assets" with offsetting liabilities recorded as a component of "Accrued expenses" and "Other long-term liabilities".
+Added: Operating lease costs are recognized on a straight-line basis over the lease term.
+Added: Finance lease costs are composed of the amortization of the ROU asset and the amounts recorded as interest.
+Added: Leases with an initial term of 12 months or less are considered short term and are not recorded on the balance sheet.
+Added: The Company recognizes a lease expense for short term leases on a straight-line basis over the lease term.
+Added: Certain of the Company's leases may also include rent escalation clauses or options to extend or terminate the lease.
+Added: These options are included in the present value recorded for the leases when it is reasonably certain that the Company will exercise that option.
+Added: None of the Company’s current leases contain guarantees of residual value.
+Added: The Company determines whether an arrangement is a lease at the inception of the contract.
+Added: Resulting operating lease right of use assets are recorded on the Consolidated Balance Sheets as a component of "Other assets" and resulting operating lease liabilities are recorded as a component of "Accrued expenses" and "Other long-term liabilities".
+Added: Generally, the Company’s operating leases relate to office space used in Mannatech’s operations, including its headquarters in Flower Mound, Texas, as well as office space in other locations around the globe in which the Company does business.
Finance lease assets are recorded on the Consolidated Balance Sheets as a component of “Property and equipment, net” with related liabilities recorded as “Current portion of finance leases” or as “Finance leases, excluding current portion”.
−Removed: As of December 31, 2019 , Mannatech has six financing leases, all of which pertain to certain equipment used in the business.
−Removed: In general, Mannatech’s operating leases relate to office space used in Mannatech’s operations, including its headquarters in Flower Mound, Texas, as well as office space in other locations around the globe in which the Company does business.
+Added: As of December 31, 2020 , all of the Company’s finance leases pertain to certain equipment used in the business.
As of December 31, 2020 , our leased assets and liabilities consisted of the following (in thousands):
−Removed: Classification
−Removed: December 31, 2019
−Removed: ROU Assets from operating leases
−Removed: ROU Assets from financing leases
−Removed: Property and equipment, net
+Added: Leases Classification December 31, 2020 December 31, 2019
+Added: ROU Assets from operating leases Other assets $ 6,943 $ 5,568
+Added: ROU Assets from financing leases Property and equipment, net $ 288 $ 269
Total leased assets $ 7,231 $ 5,837
−Removed: Accrued expenses
−Removed: Current portion of finance leases
−Removed: Other long-term liabilities
−Removed: Finance leases, excluding current portion
+Added: Operating Accrued expenses $ 2,067 $ 1,622
+Added: Financing Current portion of finance leases $ 76 $ 87
+Added: Operating Other long-term liabilities $ 6,124 $ 5,307
+Added: Financing Finance leases, excluding current portion $ 129 $ 176
Total leased liabilities $ 8,396 $ 7,192
We incurred the following lease costs related to our operating and finance leases (in thousands):
−Removed: Classification
−Removed: Twelve Months Ended
+Added: Lease Cost Classification Twelve Months Ended
+Added: December 31, 2020 Twelve Months Ended
December 31, 2019
−Removed: Operating lease cost
−Removed: Other operating cost
−Removed: Finance lease cost
−Removed: Amortization of leased assets
−Removed: Depreciation and amortization
−Removed: Interest on lease liabilities
−Removed: Interest expense
+Added: Operating leases
+Added: Operating lease costs Other operating cost 2,422 2,074
+Added: Short term lease costs Other operating cost 228 245
+Added: Finance leases
+Added: Amortization of leased assets Depreciation and amortization 115 111
+Added: Interest on lease liabilities Interest expense 16 17
Total lease cost 2,781 2,447
For the twelve months ended December 31, 2020 , cash paid amounts included in the measurement of lease liabilities included (in thousands):
−Removed: Lease Payments
−Removed: Twelve Months Ended December 31, 2019
+Added: Lease Payments Twelve Months Ended December 31, 2020 Twelve Months Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
2 unchanged sentences
Lease term and discount rates related to the Company's leases are as follows:
−Removed: December 31, 2019
+Added: December 31, 2020 December 31, 2019
Operating leases
4 unchanged sentences
Weighted-average discount rate 6.55 % 4.95 %
−Removed: As of December 31, 2019 , future minimum lease payments on operating and financing leases were as follows (in thousands):
+Added: As of December 31, 2020 and 2019 future minimum lease payments were as follows (in thousands):
December 31, 2020
−Removed: Maturity of lease liabilities
−Removed: Operating Leases
−Removed: Financing Leases
+Added: Maturity of lease liabilities Operating Leases Financing Leases
+Added: 2021 2,644 98
+Added: 2022 1,930 75
+Added: 2023 1,217 45
+Added: 2024 1,308 21
+Added: Thereafter 1,528 —
Total future minimum lease payments 9,519 240
1 unchanged sentence
Present value of minimum lease payments 8,191 205
−Removed: Under ASC Topic 840 future minimum lease payments for non-cancelable leases existing at December 31, 2018 were as follows (in thousands):
−Removed: December 31, 2018
−Removed: Maturity of lease liabilities
−Removed: Operating Leases
−Removed: Capital Leases
−Removed: Total of future minimum lease payments at December 31, 2018
−Removed: Amounts representing interest (effective interest rate 5.61%)
−Removed: Present Value of lease obligations as of December 31, 2018
ACCRUED EXPENSES
8 unchanged sentences
Accrued shipping and handling costs 399 338
+Added: Rent expense 20 39
Accrued legal and accounting fees 1,177 1,127
Current portion of operating lease liabilities 2,067 1,622
+Added: $ 8,691 $ 8,209
The components of the Company’s income before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands) :
United States $ 4,934 $ ( 5,038 )
+Added: Foreign 791 10,774
Income before income taxes $ 5,725 $ 5,736
1 unchanged sentence
Current provision (benefit):
+Added: Federal $ ( 1,086 ) $ 131
+Added: Foreign 716 1,188
+Added: ( 256 ) 1,383
Deferred provision (benefit):
+Added: Foreign ( 280 ) 1,064
+Added: ( 280 ) 1,064
+Added: $ ( 536 ) $ 2,447
A reconciliation of the Company’s effective income tax rate and the United States federal statutory income tax rate is summarized as follows, for the years ended December 31:
3 unchanged sentences
Effect of changes in valuation allowance ( 7.7 ) ( 7.3 )
−Removed: Effect of change in uncertain tax positions (net)
−Removed: Federal Sub-Part F Income from foreign operations
+Added: CARES NOL Carryback Benefit ( 25.3 ) —
+Added: Foreign Derived Intangible Income (FDII) deduction ( 6.6 ) —
Global Intangible Low Taxed Income (GILTI) (1)
+Added: Federal Sub-Part F Income from foreign operation — 10.5
Section 78 gross up — 5.4
1 unchanged sentence
Effect of changes in tax rates — 0.5
−Removed: Foreign Exchange
+Added: Foreign Charitable Contributions 1.4 —
Prior year adjustments 8.2 4.1
4 unchanged sentences
Other permanent items — 1.9
+Added: Other ( 1.1 ) 0.6
+Added: ( 9.4 ) % 42.5 %
+Added: (1) This amount relates to the reversal of the 2018 GILTI inclusion due to the GILTI high-tax election the IRS made available in Q3 2020.
For the years ended December 31, 2020 and 2019, the Company’s effective tax rate was ( 9.4 )% and 42.5 %, respectively.
−Removed: In 2019 , the Company had a significant decrease in its rate due to the mix of earnings across jurisdictions.
−Removed: For 2018 , the Company had a significant increase in its rate due to the mix of earnings across jurisdictions, valuation allowance recorded on losses in certain jurisdictions, and the impact of GILTI as a result of the TCJA passed in 2017.
+Added: In 2020, the Company had a significant decrease in its rate due to the carryback of U.S net operating losses as allowed by the CARES Act.
+Added: In 2019, the Company had a higher effective rate due to the mix of earnings across jurisdictions and valuation allowance recorded on certain losses.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
2 unchanged sentences
Deferred Revenue $ 317 $ 243
+Added: Inventory 343 215
Accrued expenses 1,034 878
4 unchanged sentences
Lease liability 922 1,674
+Added: Other 443 486
Total deferred tax assets $ 15,048 $ 15,755
5 unchanged sentences
Internally-developed software 237 265
+Added: Lease assets 884 1,659
+Added: Fixed assets 383 178
Total deferred tax liabilities $ 1,940 $ 2,502
1 unchanged sentence
(1) The Company’s net operating loss will expire as follows (dollar amounts in thousands):
−Removed: Tax Effected NOL
−Removed: Expiration Years
+Added: Jurisdiction Gross NOL Tax Effected NOL Expiration Years
+Added: Australia $ 282 $ 85 Indefinite
+Added: Bermuda $ 52 $ — N/A
+Added: China $ 242 $ 61 2024
+Added: Colombia $ 1,907 $ 591 Indefinite
+Added: Cyprus $ 1,414 $ 177 2026
+Added: Gibraltar $ 180 $ — Indefinite
+Added: Hong Kong $ 24 $ 4 Indefinite
+Added: Japan $ 139 $ 48 Indefinite
+Added: Mexico $ 10,329 $ 3,099 2021-2030
+Added: Norway $ 329 $ 72 Indefinite
+Added: $ 8 $ 2 Indefinite
+Added: Singapore $ 150 $ 26 Indefinite
+Added: South Africa $ 727 $ 204 Indefinite
+Added: Sweden $ 513 $ 106 Indefinite
Switzerland $ 6,713 $ 617 2021-2028
−Removed: United States - Federal
−Removed: United Kingdom
−Removed: (2) On August 1, 2016, the Company established a legal entity in Russia.
−Removed: (3) On July 1, 2019, the Company suspended operations in Switzerland, but maintains the legal entity.
−Removed: (4) On March 21, 2014, the Company suspended operations in the Ukraine, but maintains the legal entity.
−Removed: In addition to net operating loss attributes, the Company has recorded a foreign tax credit carryforward of $ 4.2 million , which will begin to expire in 2025 and a charitable contribution carryforward of $0.1 million , which will expire between 2019-2023.
−Removed: The Company maintains a full valuation against both the foreign tax credits and the charitable contribution carryforward.
+Added: Taiwan $ 5,569 $ 1,114 2021-2030
+Added: United States - State $ 13,506 $ 804 2022-2040
+Added: United Kingdom $ 370 $ 70 Indefinite
+Added: The United States fully utilized its federal net operation losses due to the passage of the CARES Act.
+Added: In addition to net operating loss attributes, the Company has recorded a foreign tax credit carryforward of $ 4.6 million, which will begin to expire in 2025.
+Added: The Company maintains a full valuation against the foreign tax credits.
At December 31, 2020 and 2019, the Company’s valuation allowance was $ 11.9 million and $ 12.4 million, respectively.
2 unchanged sentences
Furthermore, the weight given to the potential effect of such evidence is commensurate with the extent the evidence can be objectively verified.
−Removed: The valuation allowances presented below (in millions) at December 31, 2019 and 2018 , represented a reserve against the Company’s net deferred tax asset the Company believed the “more likely than not ” criterion for recognition purposes could not be met.
−Removed: valuation allowance decreased due to the utilization of net operating losses in the current year.
+Added: The valuation allowance against the Company's deferred tax assets consisted of the following at December 31 ( in thousands):
+Added: Country 2020 2019
+Added: Australia $ 0.2 $ 0.2
+Added: China 0.4 0.3
+Added: Colombia 0.6 0.6
+Added: Mexico 3.1 3.3
+Added: Norway 0.1 0.1
+Added: South Africa 0.2 0.2
+Added: Switzerland 0.5 0.5
+Added: Taiwan 1.1 1.0
+Added: Ukraine — 0.1
United Kingdom — 0.1
United States 5.5 6.0
−Removed: Other Jurisdictions
−Removed: On December 22, 2017, President Trump signed into law H.R.
−Removed: 1/Public Law No.
−Removed: 115-97, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” which reduced the US federal tax rate from 35% to 21% for tax years beginning after January 1, 2018.
−Removed: Pursuant to ASC 740-10-25-47, the effects of the new federal legislation are recognized upon enactment, which is the date the president signs a bill into law.
−Removed: Deferred tax assets (liabilities) are classified in the accompanying Consolidated Balance Sheets of December 31 as follows (in thousands) :
+Added: Total $ 11.9 $ 12.4
+Added: Deferred tax assets (liabilities) are classified in the accompanying Consolidated Balance Sheets at December 31 as follows (in thousands) :
Deferred tax assets $ 1,178 $ 881
1 unchanged sentence
Net deferred tax assets $ 1,175 $ 878
−Removed: Topic 740 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements, uncertain tax positions that it has taken or expects to take on a tax return.
+Added: On January 1, 2007, the Company adopted FIN 48, which was codified into Topic 740, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements, uncertain tax positions that it has taken or expects to take on a tax return.
Topic 740 requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position.
7 unchanged sentences
Reductions of tax positions of prior years — —
+Added: Settlements — —
Balance as of December 31 $ 79 $ 79
The Company recognizes interest and/or penalties related to uncertain tax positions in current income tax expense.
−Removed: For each the years ended December 31, 2019 and December 31, 2018, the Company had accrued interest and penalties of $0.1 million in the consolidated balance sheet, of which $13 thousand and $11 thousand were accrued in the consolidated statement of operations, for December 31, 2019 and 2018, respectively.
+Added: For each of the years ended December 31, 2020 and 2019, the Company had accrued interest and penalties of $ 0.1 million in the consolidated balance sheet, of which $ 11 thousand and $ 13 thousand were expensed in the consolidated statement of operations, for December 31, 2020 and 2019, respectively.
Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase or decrease within the next twelve months due to uncertainties regarding the timing of any examinations, the Company does not expect its unrecognized tax benefits to decrease during the next twelve months.
1 unchanged sentence
As of December 31, 2020 , the tax years that remained subject to examination by a major tax jurisdiction for the Company’s most significant subsidiaries were as follows:
+Added: Jurisdiction Open Years
+Added: Australia 2012-2019
+Added: Japan 2015-2019
Republic of Korea 2016-2019
+Added: Switzerland 2016-2019
United States 2014-2015, 2017-2019
7 unchanged sentences
Stanley Fredrick, the Company’s Chairman of the Board and a major shareholder.
−Removed: We paid employment compensation of approximately $321,000 in 2019 and 2018 for salary, bonus, auto allowance, and other compensation to Landen Fredrick.
+Added: We paid employment compensation of approximately $ 407,000 and $ 321,000 in 2020 and 2019, respectively, for salary, bonus, auto allowance, and other compensation to Landen Fredrick.
Landen Fredrick is the son of J.
1 unchanged sentence
In addition, Landen Fredrick participated in the employee health care benefit plans available to all employees of the Company.
−Removed: Effective January 1, 2018, Landen Fredrick was promoted from Senior Vice President of Global Operations to Chief Global Sales Officer and President, North America.
−Removed: Fredrick had served as Senior Vice President, Global Operations since August of 2016.
+Added: Effective November 12, 2019, Landen Fredrick was promoted from Chief Global Sales Officer and President, North America to Chief Sales & Marketing Officer.
+Added: Fredrick had served as Chief Global Sales Officer and President, North America since January 1, 2018.
Prior to that, Mr.
−Removed: Fredrick served as Senior Vice President, Supply Chain and IT since August of 2015, Vice President, Global Operations since May of 2013, Vice President, North American Sales and Operations since January of 2011, Vice President, North American Sales since February of 2010 and as Senior Director of Tools and Training since his hire in May of 2006.
+Added: Fredrick had served as Senior Vice President, Global Operations since August of 2016.
+Added: as Senior Vice President, Supply Chain and IT since August of 2015, Vice President, Global Operations since May of 2013, Vice President, North American Sales and Operations since January of 2011, Vice President, North American Sales since February of 2010 and as Senior Director of Tools and Training since his hire in May of 2006.
Landen Fredrick also serves as chairman of the Board of the M5M Foundation.
Kevin Robbins is a member of the Company's Board of Directors, serving on the Science and Marketing Committee, and is also an independent associate, holding a position in the Company's associate global downline network marketing system.
−Removed: He has also consulted on the associate commission plan.
+Added: He has also consulted on the associate commission plan in the past, but did not do so during the year ended December 31, 2020.
In addition, several of Mr.
Robbins’ family members are independent associates.
−Removed: The Company pays commissions and incentives to its independent associates and, during 2019 and 2018 , the Company paid aggregate commissions and incentives to Mr.
−Removed: Robbins and his family of approximately $2.0 million and $2.2 million , respectively.
+Added: The Company pays commissions and incentives to its independent associates and, during each of 2020 and 2019, the Company paid aggregate commissions and incentives to Mr.
+Added: Robbins and his family of approximately $ 1.9 million.
The aggregate amount of commissions and incentives paid to Mr.
−Removed: Robbins was approximately $0.2 million in each of 2019 and 2018 , respectively.
+Added: Robbins was approximately $ 0.2 million in each of 2020 and 2019.
The aggregate amount of commission and incentives paid in 2020 and 2019 to Mr.
2 unchanged sentences
Robbins and his family members are in accordance with the Company’s global associate career and compensation plan.
−Removed: The Company paid less than $0.1 million to Mr.
−Removed: Kevin Robbins for consulting fees in 2019.
Johanna Bala, the wife of Al Bala, the Company’s Chief Executive Officer and President, is an independent associate who earns commissions and incentives.
−Removed: The aggregate amount of commission and incentives paid to Johanna Bala was approximately $0.1 million in 2019 and $0.2 million in 2018 .
+Added: The aggregate amount of commission and incentives paid to Johanna Bala was approximately $ 0.1 million in each of 2020 and 2019.
The Company paid less than $ 0.1 million of commissions and incentives to other members of Al Bala's family in both years.
19 unchanged sentences
Balance, beginning of year $ 319 $ 388
+Added: Service cost 47 56
Interest cost 1 1
1 unchanged sentence
Benefits paid to participants ( 30 ) ( 128 )
+Added: Special termination benefit 8 —
Foreign currency 19 4
36 unchanged sentences
Components of Expense
−Removed: Service Cost for the Benefit Plan is included within selling, general and administrative expenses and all other items noted in the table below (Interest Cost, Amortization of Transition Obligation, and Prior Service Cost) are included within other income and expense.
+Added: Service Cost for the Benefit Plan is included within selling and administrative expenses and all other items noted in the table below (Interest Cost, Amortization of Transition Obligation, and Prior Service Cost) are included within other income (expense).
Pension costs, which are included within Consolidated Statement of Operations are detailed below for the years ended December 31 (in thousands) :
+Added: Service cost $ 47 $ 56
Interest cost 1 1
Amortization of transition obligation 4 4
+Added: Gain (loss) ( 6 ) ( 4 )
+Added: Special termination 8 —
Prior service cost ( 44 ) ( 43 )
17 unchanged sentences
A summary of changes in stock options outstanding during the year ended December 31, 2020 , is as follows:
−Removed: (in thousands)
+Added: (in thousands) Weighted
+Added: price Weighted
+Added: (in years) Aggregate
Outstanding at beginning of year 381 $ 16.24
+Added: Granted 5 16.93
+Added: Exercised ( 28 ) 11.47
+Added: Expired ( 49 ) 20.18
+Added: Forfeit ( 3 ) 15.70
Outstanding at end of year 306 $ 16.07 5.36 $ 922
1 unchanged sentence
During 2020, the Company issued 28,157 new shares upon the exercise of options and granted 5,000 new options to management and members of the Board.
−Removed: Options exercised during the year ending December 31, 2019 and December 31, 2018 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price of less than $0.1 million .
+Added: Options exercised during the year ending December 31, 2020 and December 31, 2019 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price of $ 0.1 million and less than $ 0.1 million, respectively.
Non-vested shares at December 31, 2020 and 2019 were approximately 8,336 and 55,335 , respectively.
6 unchanged sentences
Expected market price volatility:
+Added: 52.5 % 47.6 %
Average expected life of stock options:
−Removed: The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatilities of the Company’s stock.
+Added: 4.5 years 4.5 years
+Added: The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatility of the Company’s stock.
The expected life assumptions are based on the Company’s historical employee exercise and forfeiture behavior.
5 unchanged sentences
Effect on net income $ 115 $ 433
−Removed: As of December 31, 2019 , the Company had approximately $0.2 million of total unrecognized compensation expense related to stock options and restricted share awards currently outstanding, to be recognized in future years, ending December 31, as follows (in thousands):
+Added: As of December 31, 2020 , the Company had less than $ 0.1 million of total unrecognized compensation expense related to stock options currently outstanding, to be recognized in future years, ending December 31, as follows (in thousands):
Total gross unrecognized
−Removed: compensation expense
−Removed: Total tax benefit associated
+Added: compensation expense Total tax benefit associated
with unrecognized
−Removed: compensation expense
+Added: compensation expense Total net
compensation expense
+Added: 2021 $ 15 $ 3 $ 12
+Added: $ 18 $ 4 $ 14
COMMITMENTS AND CONTINGENCIES
−Removed: Operating Leases
−Removed: The Company leases certain office space, automobiles, computer hardware, and warehouse equipment under various non-cancelable operating leases.
−Removed: Some of these leases have renewal options.
−Removed: The Company also leases equipment under various month-to-month cancelable operating leases.
−Removed: For the years ended December 31, 2019 and 2018 , total rent expense was approximately $3.2 million and $3.7 million , respectively.
−Removed: Approximate future minimum rental commitments for non-cancelable operating leases (in thousands) are as follows:
−Removed: Years ending December 31,
Purchase Commitments
2 unchanged sentences
In November 2016, the Company entered into a four -year supply agreement to purchase an aloe vera powder in whole leaf aloe form and an aloe vera gel extract from Natural Aloe de Costa Rica, S.A.
+Added: The agreement changed from a 2 year auto-renew to 1 year and extended until November 2021 with a 6 month transition period.
As of December 31, 2020 , the Company is required to purchase an aggregate of $ 7.8 million through 2022.
9 unchanged sentences
Busan Custom Office , Busan District Court, Korea
−Removed: On or before April 12, 2015, Mannatech Korea, Ltd.
−Removed: filed a suit against the Busan Custom Office (“BCO”) to challenge BCO’s method of calculation regarding its assessment notice issued on July 11, 2013.
−Removed: The assessment notice included an audit of the Company’s imported goods covering fiscal years 2008 through 2012 and required the Company to pay $1.0 million for this assessment, all of which was paid in January 2014.
+Added: On or before April 12, 2015, Mannatech Korea Co., Ltd.
+Added: (“Mannatech Korea”) filed a suit against the Busan Custom Office (“BCO”) to challenge BCO’s method of calculation regarding its assessment notice issued on July 11, 2013.
+Added: The assessment notice included an audit of Mannatech Korea’s imported goods covering fiscal years 2008 through 2012 and required Mannatech Korea to pay $ 1.0 million for this assessment, all of which was paid in January 2014.
Both parties submitted a response to the Court’s inquiry on January 15, 2016.
The final hearing for the case was held on May 26, 2016 where each party presented their respective arguments.
−Removed: The Court set the decision hearing on October 27, 2016, and the Court decided the case in the Company’s favor.
+Added: The Court set the decision hearing on October 27, 2016, and the Court decided the case in Mannatech Korea’s favor.
However, on November 18, 2016, BCO filed an appeal to the Busan High Court.
2 unchanged sentences
The Court issued its decision on June 30, 2017 in favor of the BCO.
−Removed: The Company appealed this decision on August 24, 2017.
−Removed: Since the appeal of the decision of the Busan High Court to the Supreme Court, there have been no further developments and the Company is still awaiting the decision of the Supreme Court.
−Removed: This matter remains open.
+Added: Mannatech Korea appealed this decision on August 24, 2017.
+Added: On December 24, 2020 Mannatech Korea received notice that the Court issued its decision and ruled to reject its appeal, which means the customs imposition is now final and conclusive.
+Added: Mannatech Korea and the Company consider this matter closed.
Litigation - Product Liability
4 unchanged sentences
The plaintiffs are the surviving spouse and three children (the “Plaintiffs”) of Kong Seokhwan, a cancer patient who died in October 2017.
−Removed: The Plaintiffs allege that co-defendant and former Mannatech Associate, Eunbee Cho, instructed the deceased to take the Company’s products as treatment for cancer.
+Added: The Plaintiffs allege that co-defendant and former independent associate, Eunbee Cho, instructed the deceased to take the Company’s products as treatment for cancer.
Eunbee Cho was found guilty of fraud and began serving a sentence of one year and six months in November 2019.
1 unchanged sentence
Mannatech Korea has engaged local counsel to defend this matter.
−Removed: It is not possible at this time to predict whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter.
+Added: An evidentiary hearing was held on October 21, 2020.
+Added: Due to restrictions in place relating to COVID-19, hearings scheduled during the fourth quarter of 2020 for this matter were postponed;
+Added: an evidentiary hearing was held on March 10, 2021 where another hearing was scheduled for April 28, 2021.
+Added: It is not possible at this time to predict whether Mannatech Korea will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter.
However, Mannatech Korea believes it has a valid defense and will vigorously defend this claim.
This matter remains open.
−Removed: Litigation - Product Liability
MTEX Hong Kong Limited and Beili Guan, Case No.
2019-Jin-0116-Civil-2339, Binhai New District Court, Tianjin, China
−Removed: On or before September 2, 2019, the Company received service of process of the above-captioned matter.
−Removed: Ruiguo Ma (the “Plaintiff”) is alleging that his child suffered tooth decay after consuming Mannatech’s MannaBears product and underwent several surgeries.
+Added: On or before September 2, 2019, MTEX Hong Kong Limited (“MTEX Hong Kong”) received service of process of the above-captioned matter.
+Added: Ruiguo Ma (the "Plaintiff") is alleging that his child suffered tooth decay after consuming the Company's MannaBears product and underwent several surgeries.
The Plaintiff is seeking damages of approximately $50,000 USD.
−Removed: The Company has engaged local counsel to defend this case.
+Added: MTEX Hong Kong has engaged local counsel to defend this case.
The Company has provided notice to its insurance carrier.
2 unchanged sentences
The first hearing occurred on September 11, 2019, and the second hearing occurred on October 30, 2019, where each party presented their respective arguments.
−Removed: The Company anticipates a judgment in the first quarter of 2020.
−Removed: It is not possible at this time to predict whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter.
−Removed: However, the Company believes it has a valid defense and will vigorously defend this claim.
+Added: On August 25, 2020, the court denied all of the Plaintiff's motions and granted judgment in favor of MTEX Hong Kong.
+Added: The Plaintiff appealed the decision on September 21, 2020.
+Added: On January 27, 2021, the appellate court issued a judgment upholding the lower court’s decision.
+Added: MTEX Hong Kong and the Company consider this matter closed.
+Added: Beili Guan, MTEX Hong Kong Limited, and Mannatech, Incorporated, Case No.
+Added: 2020-Jin-0116-
+Added: Civil-7655, Binhai New District Court, Tianjin, China
+Added: On November 16, 2020, MTEX Hong Kong received service of process of the above-captioned matter.
+Added: Hong Wang (the “Plaintiff”) is alleging that various Mannatech’s products that she purchased violate the China Food Safety Law.
+Added: In addition, Plaintiff alleges that her son suffered from tooth decay after consuming the MannaBears product and that the product violates the China Consumer Protection Law.
+Added: The Plaintiff is seeking damages of approximately USD $286,600.
+Added: On November 22, 2020, MTEX Hong Kong filed a motion challenging the court’s jurisdiction.
+Added: It is not possible at this time to predict whether MTEX Hong Kong will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter.
+Added: However, MTEX Hong Kong believes it has a valid defense and will vigorously defend this claim.
This matter remains open.
8 unchanged sentences
The Company believes it has adequately reserved for the contingencies arising from current legal matters where an outcome was deemed to be probable, and the loss amount could be reasonably estimated.
+Added: No legal reserve was deemed necessary at December 31, 2020 .
SHAREHOLDERS’ EQUITY
9 unchanged sentences
In August of 2018 and November of 2018, the Company's Board of Directors reactivated an additional $ 0.5 million (of the original $20.0 million authorization), respectively, in shares of the Company's common stock to be repurchased in the open market.
+Added: In December of 2019, the Company’s Board of Directors approved a share repurchase program to acquire up to $1.0 million (of the original $20.0 million authorization) of the Company’s common stock through March 1, 2020.
+Added: In August 2020, the Company’s Board of Directors approved a share repurchase program to acquire up to $1.0 million (of the original $20.0 million authorization) of the Company’s common stock through August 16, 2021.
As of August 8, 2017, the maximum number of shares available for repurchase under the June 2004 Plan was 19,084 , and the total number of shares purchased in the open market under the June 2004 Plan was 112,672 .
1 unchanged sentence
The Company does not have any stock repurchase plans or programs other than the June 2004 Plan and the August 2006 Plan.
−Removed: On May 17, 2018, we announced our intention to commence a modified Dutch auction cash tender offer to purchase up to $16.0 million of our common stock.
−Removed: The tender offer commenced on May 18, 2018 and expired on June 15, 2018.
−Removed: As a result of the tender offer, we accepted for purchase 316,659 shares of our common stock at a purchase price of $21.00 per share, for an aggregate purchase price of $6.6 million , excluding fees and expenses relating to the tender offer, which was funded from cash on hand.
−Removed: During the year ended December 31, 2019 , the Company repurchased 18,753 shares at an average price of $16.25 .
+Added: On May 29, 2020, the Company commenced a modified Dutch auction cash tender offer to purchase up to $ 5.0 million of its outstanding common stock, par value $0.0001 per share, at a per share price not greater than $17.00 nor less than $15.00, to each seller in cash, less any applicable withholding taxes and without interest (the "tender offer").
+Added: The tender offer expired on June 25, 2020.
+Added: As a result of the tender offer, the Company accepted for purchase a total of 294,117 shares of its common stock, which were properly tendered and not properly withdrawn at the price of $ 17.00 per share, for an aggregate purchase price of $ 5.0 million, which was funded from cash on hand.
+Added: Due to the tender offer being oversubscribed, the Company purchased only a prorated p ortion of those shares properly tendered by each tendering shareholder (other than "odd lot" holders whose shares were purchased on a priority basis) at or below the final per share purchase price.
+Added: The final proration factor for the tender offer was approximately 86%.
+Added: The common shares represented approximately 12.31% of the Company's total outstanding shares as of April 30, 2020.
+Added: During the year ended December 31, 2020, the Company repurchased 351,581 shares of its common stock, which includes the 294,117 shares repurchased pursuant to the tender offer, at an average price of $ 17.79 .
During the year ended December 31, 2019, the Company repurchased 18,753 shares at an average price of $ 16.25 .
4 unchanged sentences
The after-tax components of accumulated other comprehensive income, are as follows (in thousands) :
+Added: Translation Pension
Postretirement
+Added: Obligation Accumulated
Comprehensive
8 unchanged sentences
Balance as of December 31, 2020 $ 4,793 $ 357 $ 5,150
−Removed: On March 12, 2019, the Board declared a dividend of $0.125 per share that was paid on March 29, 2019 to shareholders of record on March 22, 2019, for an aggregate amount of $0.3 million .
+Added: On February 14, 2020, the Board declared a dividend of $ 0.125 per share that was paid on March 27, 2020 to shareholders of record on March 13, 2020, for an aggregate amount of $ 0.3 million.
On May 27, 2020, the Board declared a dividend of $ 0.125 per share that was paid on June 24, 2020 to shareholders of record on June 12, 2020, for an aggregate amount of $ 0.3 million.
−Removed: On August 15, 2019, the declared a dividend of $0.125 per share that was paid on September 24, 2019 to shareholders of record on September 10, 2019, for an aggregate amount of $0.3 million .
+Added: On August 28, 2020, the Board declared a dividend of $ 0.16 per share that was paid on September 29, 2020 to shareholders of record on September 15, 2020, for an aggregate amount of $ 0.3 million.
On November 20, 2020, the Board declared a dividend of $ 1.16 per share that was paid on December 30, 2020 to shareholders of record on December 16, 2020, for an aggregate amount of $ 2.4 million.
+Added: This dividend combined the quarterly dividend amount of $0.16 per share with a special dividend amount of $1.00 per share.
During the year ended December 31, 2020, the Company declared and paid dividends amounting to an aggregate of $ 3.3 million.
2 unchanged sentences
EARNINGS PER SHARE
−Removed: The Company calculates basic Earnings per Share ("EPS") by dividing net income (loss) by the weighted-average number of common shares outstanding for the period.
+Added: The Company calculates basic Earnings per Share ("EPS") by dividing net income by the weighted-average number of common shares outstanding for the period.
Diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards outstanding under the Mannatech, Incorporated 2017 Stock Incentive Plan.
1 unchanged sentence
For the year ended December 31, 2020, there were 2.24 million weighted-average common shares outstanding used for the basic EPS calculation.
−Removed: Approximately 0 .05 million shares subject to options were included in the calculation resulting in 2.44 million dilutive shares used to calculate diluted EPS.
−Removed: For the year ended December 31, 2019, approximately 1.0 million of the Company's stock options were excluded from the diluted EPS calculation as the effect would have been antidilutive.
−Removed: For the year ended December 31, 2018, shares of the Company's stock subject to options were excluded from the diluted EPS calculation as their effect would have been antidilutive.
−Removed: The Company reported a net loss for the year ended December 31, 2018.
+Added: For the year ended December 31, 2020, approximately 0.03 million shares subject to options were included in the calculation resulting in 2.26 million dilutive shares used to calculate diluted EPS.
+Added: For the year ended December 31, 2020, approximately 0.9 million of the Company's common stock subject to options were excluded from the diluted EPS calculation as the effect would have been antidilutive.
+Added: In determining the potential dilution effect of outstanding stock options during 2019, the Company used the average common stock close price of $ 17.11 per share.
+Added: For the year ended December 31, 2019, there were 2.39 million weighted-average common shares outstanding used for the basic EPS calculation.
+Added: For the year ended December 31, 2019, approximately 0.05 million shares subject to options were included in the calculation resulting in 2.44 million dilutive shares used to calculate diluted EPS.
+Added: For the year ended December 31, 2019, approximately 1.0 million of the Company's common stock subject to options were excluded from the diluted EPS calculation as the effect would have been antidilutive.
SEGMENT INFORMATION
−Removed: The Company's sole reporting segment is one where we sell proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products through network marketing distribution channels operating in twenty-five countries.
−Removed: Each of the business units sells similar packs (with the exception of the United States, Canada, South Africa, Japan, Australia, New Zealand, Singapore, Hong Kong, and Taiwan where packs have been replaced with associate fees, see Note 1 Organization and Summary of Significant Accounting Policies ) and products and possesses similar economic characteristics, such as selling prices and gross margins.
+Added: The Company's sole reporting segment is one where we sell proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products through network marketing distribution channels operating in twenty-four countries.
+Added: Each of the business units receives associate fees or sells similar packs (in the case of Mexico and South Korea, where packs have not been replaced with associate fees, see Note 1, Organization and Summary of Significant Accounting Policies ) and products and possesses similar economic characteristics, such as selling prices and gross margins.
In each country, the Company markets its products and pays commissions and incentives in similar market environments.
−Removed: The Company’s management reviews its financial information by country and focuses its internal reporting and analysis of revenues by packs and product sales.
+Added: The Company’s management reviews its financial information by country and focuses its internal reporting and analysis of revenues by pack sales and associate fees and product sales.
The Company sells its products through its independent associates who occupy positions in our network and distribute products through similar distribution channels in each country.
3 unchanged sentences
Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China.
−Removed: The Company operates facilities in thirteen countries and sells product in twenty-six countries around the world.
−Removed: These facilities are located in the United States, Canada, Australia, the United Kingdom, Japan, the Republic of Korea (South Korea), Taiwan, South Africa, Mexico, Hong Kong, Singapore, Colombia and China.
+Added: The Company operates facilities in eleven countries and sells product in twenty-five countries around the world.
+Added: These facilities are located in the United States, Canada, Australia, the United Kingdom, Japan, the Republic of Korea (South Korea), Taiwan, South Africa, Mexico, Hong Kong and China.
Each facility services different geographic areas.
We currently sell our products in three regions:
−Removed: (i) the Americas (the United States, Canada, Colombia and Mexico);
+Added: (i) the Americas (the United States, Canada and Mexico);
(ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom);
1 unchanged sentence
Consolidated net sales shipped to customers in these regions, along with pack and product information for the years ended December 31, are as follows (in millions, except percentages) :
+Added: Region 2020 2019
+Added: Americas $ 44.9 29.7 % $ 48.0 30.4 %
+Added: Asia/Pacific 92.1 60.8 % 96.0 60.9 %
+Added: EMEA 14.4 9.5 % 13.7 8.7 %
+Added: Total $ 151.4 100.0 % $ 157.7 100.0 %
Consolidated product sales $ 146.2 $ 154.6
1 unchanged sentence
Consolidated other 1.0 0.8
+Added: Total $ 151.4 $ 157.7
Long-lived assets by region, which include property and equipment and construction in progress for the Company and its subsidiaries, as of December 31, reside in the following regions, as follows (in millions) :
+Added: Region 2020 2019
+Added: Americas $ 4.4 $ 5.1
+Added: Asia/Pacific 1.0 1.0
+Added: Total $ 5.4 $ 6.1
Inventory balances by region, which consist of raw materials and finished goods, including promotional materials, and offset by obsolete inventories, for the Company and its subsidiaries, reside in the following regions as of December 31, as follows (in millions) :
−Removed: SUBSEQUENT EVENTS
−Removed: On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus ("COVID-19") first identified in Wuhan, China and the risks to the international community as the virus spreads globally beyond its point of origin.
−Removed: In March 2020, the WHO declared the outbreak of COVID-19 as a pandemic, which has spread throughout our international regions and continues to spread throughout the United States.
−Removed: As a result, we are taking steps to protect the health, safety and well-being of our customers, associates, employees, and communities by closing some offices and equipping various staff members to work remotely for an uncertain period of time.
−Removed: The Company depends on an independent salesforce of distributors (referred to as “associates”) to market and sell its products to consumers.
−Removed: Developments such as social distancing and shelter-in-place directives could impact their ability to engage with potential and existing customers.
−Removed: The adverse economic effects of COVID-19 may also materially decrease demand for the Company’s products based on changes in consumer behavior or the restrictions in place by governments trying to curb the outbreak.
−Removed: For example, the Company has rescheduled corporate sponsored events, and in some cases, our associates have canceled sales meetings.
−Removed: In some cases, the Company is experiencing shortages of raw materials and ingredients.
−Removed: We have started to experience challenges in getting these materials and ingredients to our contract manufacturers and finished products to our distribution centers resulting from reductions in global transportation capacity.
−Removed: Also, due to the impacts on the global supply chain, the Company may find obstacles in shipping to our customers.
−Removed: While the conditions described above are expected to be temporary, prolonged workforce disruptions, continued disruption in our supply chain and potential decreases in consumer demands may negatively impact sales in fiscal year 2020 and the Company’s overall liquidity.
−Removed: Moreover, the outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown, which would decrease the Company’s value.
−Removed: We have procedures in place designed to promote and enforce compliance by our employees and independent associates related to the regulations that govern the sale and distribution of our products.
−Removed: Procedures are in place to implement sanctions against an independent associate who violates the Company’s policies regarding claims that our products can treat, cure, mitigate or prevent any disease.
−Removed: If our associates are non-compliant in their claims of the products, the Company could face regulatory scrutiny, which could result in fines or other penalties, which would impact how we operate and could negatively affect the Company’s sales and operations in 2020.
−Removed: The full impact of COVID-19 continues to evolve as of the date of this report.
−Removed: Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce.
−Removed: Given the daily evolution of
−Removed: COVID-19 and the global responses to curb its spread, the Company is not able to estimate the effects of COVID-19 on its results of operations, financial condition, or liquidity for fiscal year 2020.
+Added: Region 2020 2019
+Added: Americas $ 5.8 $ 5.4
+Added: Asia/Pacific 5.7 3.8
+Added: Total $ 12.8 $ 10.2
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.