x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
371172197
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification Number)
|
|
incorporation
or organization)
|
||
136
Chesterfield Industrial Boulevard
Chesterfield,
Missouri
|
63005
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
|
Common
Stock, par value $0.001
|
NASDAQ
Global Select Market
|
Document
|
Part
of Form 10-K into Which
Document
Is Incorporated
|
|
Sections
of the registrant’s definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on May 22, 2008, which is expected to be
filed no
later than 120 days after December 31, 2007
|
Part
III
|
Part
I
|
||
Item
No. 1
|
Business
|
1
|
Item
No. 1A
|
Risk
Factors
|
16
|
Item
No. 1B
|
Unresolved
Staff Comments
|
25
|
Item
No. 2
|
Properties
|
25
|
Item
No. 3
|
Legal
Proceedings
|
25
|
Item
No. 4
|
Submission
of Matters to a Vote of Security Holders
|
25
|
Part
II
|
||
Item
No. 5
|
Market
for Registrant’s Common Equity, Related Stockholder
|
|
Matters
and Issuer Purchases of Equity Securities
|
26
|
|
Item
No. 6
|
Selected
Financial Data
|
28
|
Item
No. 7
|
Management’s
Discussion and Analysis of
|
|
Financial
Condition and Results of Operations
|
29
|
|
Item
No. 7A
|
Quantitative
and Qualitative Disclosures Regarding Market Risk
|
41
|
Item
No. 8
|
Financial
Statements and Supplementary Data
|
42
|
Item
No. 9
|
Changes
in and Disagreements with Accountants
|
|
on
Accounting and Financial Disclosure
|
42
|
|
Item
No. 9A
|
Controls
and Procedures
|
42
|
Item
No. 9B
|
Other
Information
|
42
|
Part
III
|
||
Item
No. 10
|
Directors
and Executive Officers of the Registrant
|
43
|
Item
No. 11
|
Executive
Compensation
|
43
|
Item
No. 12
|
Security
Ownership of Certain Beneficial Owners
|
|
and
Management and Related Stockholder Matters
|
43
|
|
Item
No. 13
|
Certain
Relationships and Related Transactions
|
43
|
Item
No. 14
|
Principal
Accounting Fees and Services
|
43
|
Part
IV
|
||
Item
No. 15
|
Exhibits
and Financial Statement Schedules
|
43
|
• |
Reliv
Classic and Reliv NOW — two basic nutritional supplements containing
a full and balanced blend of vitamins, minerals, proteins and herbs
|
• |
Innergize! —
an isotonic sports supplement in three flavors
|
• |
FibRestore —
a high-fiber and antioxidant supplement
|
•
|
Aging
Population: The
U.S. Census Bureau projects that, by 2010, approximately 39.2% of the
U.S. population will be 45 years of age or older, up from 34.5%
in 2000. This growing population is expected to live longer, as
the
average life expectancy reached an all-time high of 75.2 years for
men and 80.4 years for women in 2004 according to the Centers for
Disease Control, or CDC. We believe this growing population will
continue to focus on their nutritional needs as
they age.
|
•
|
Rising
Healthcare Costs and Use of Preventive Measures: The
cost of the U.S. healthcare system has increased rapidly, reaching
approximately $2.3 trillion in 2007 and is expected to reach
$4.2 trillion by 2016, according to the National Coalition on Health
Care. Since 2000, insurance premiums for family coverage have increased
by
73% compared with inflation growth of 14% according to the 2005
Employer
Health Benefits Survey by the Kaiser Family Foundation and Health
Research
and Educational Trust. In order to maintain quality of life as
well as
reduce medical costs, many consumers take preventative measures
to improve
their general health, including the use of nutritional
supplements.
|
•
|
Increasing
Focus on Weight Management: A
study from the CDC completed in 2004 estimated that 66% of the
U.S. adult
population is overweight and 32% is obese. Since being overweight
can lead
to more serious health concerns such as diabetes, heart disease
and other
chronic illnesses, we believe that the rise in obesity will result
in an
increased need not only for weight loss products but wellness products
as
well.
|
•
|
Increasing
Focus on Fitness: In
its 2005 annual report, the International Health, Racquet &
Sportsclub Association, or IHRSA, estimated that there are approximately
85 million health club members worldwide, up from approximately
60 million five years ago, representing a compound annual growth rate
of 7%. In the United States, there were approximately
41 million health club members, representing 14% of the population,
according to the IHRSA report. We believe that fitness-oriented
consumers
are interested in taking sports nutrition products to increase
energy,
endurance and strength during exercise.
|
Product
Category
|
Product
Name
|
%
of 2007
Net
Sales(1)
|
Year
Introduced
|
|||||||
Basic
Nutrition
|
Reliv
Classic
|
21.3
|
1988
|
|||||||
|
Reliv
NOW
|
14.7
|
1988
|
|||||||
|
NOW
for Kids
|
3.9
|
2000
|
|||||||
|
Reliv
Delight
|
0.1
|
2001
|
|||||||
|
|
|
||||||||
Specific
Wellness
|
FibRestore
|
14.9
|
1993
|
|||||||
|
Arthaffect
|
7.2
|
1996
|
|||||||
|
ReversAge
|
4.4
|
2000
|
|||||||
|
SoySentials
|
2.2
|
1998
|
|||||||
|
CardioSentials
|
2.4
|
2005
|
|||||||
|
|
|||||||||
Weight
Management(2)
|
Slimplicity
Meal Replacement
|
6.2
|
2007
|
|||||||
|
Slimplicity
Accelerator Capsule
|
3.1
|
2007
|
|||||||
|
Reliv
Ultrim Plus
|
1.0
|
1988
|
|||||||
|
Cellebrate
|
0.8
|
1995
|
|||||||
|
|
|
||||||||
Sports
Nutrition
|
Innergize!
|
13.6
|
1991
|
|||||||
|
ProVantage
|
3.1
|
1997
|
|||||||
|
|
|
||||||||
Skin
Care
|
ReversAge
Skin Care
|
1.1
|
2001
|
(1) |
This
table does not include net sales for the year ended December 31, 2007
related to freight and handling and sales of marketing materials,
which
represented approximately 11.8% of net sales for the year ended
December 31, 2007.
|
(2) |
In
February 2007, we introduced our Slimplicity Meal Replacement formula
and
Slimplicity Accelerator Capsules in the United States and in January
2008,
we introduced Slimplicity in each of our European markets. Upon
introduction of our Slimplicity products in a particular market,
our Reliv
Ultrim-Plus line was discontinued in that market.
|
•
|
Reliv
Classic is a nutritional supplement containing a variety of vitamins
and
minerals, soy and other protein sources and various herbs. It is
a
vegetarian product that contains no animal compounds, artificial
preservatives, artificial flavors or added simple sugars. Reliv
Classic is
available in the United States, Australia, New Zealand, Canada,
Germany,
Austria, the Netherlands, the United Kingdom, Ireland, Malaysia,
Singapore
and the Philippines.
|
•
|
Reliv
NOW is a nutritional supplement containing a variety of vitamins
and
minerals, soy and other protein sources and various herbs. Reliv
NOW is
available in every country where we
operate.
|
•
|
NOW
for Kids is a product designed to provide a balanced nutritional
supplement for a child’s diet and contains a variety of vitamins and
minerals. NOW for Kids is available in Australia, New Zealand,
United
States, the United Kingdom, Ireland and the
Philippines.
|
•
|
Reliv
Delight is a powdered nutritional supplement sold as a milk replacement.
Reliv Delight is available in Mexico and the United
States.
|
•
|
ReversAge
is a patented youth-promoting nutritional supplement designed to
slow down
the effects of the aging process. Three proprietary complexes form
the
foundation of the supplement: longevity complex, antioxidant complex
and
herbal complex. The longevity complex is restorative and designed
to
replenish key hormones while creating balance within the body’s major
systems; the antioxidant complex is designed to slow aging at the
cellular
level and the herbal complex delivers a variety of herbs, including
Ginkgo
Biloba and Maca. ReversAge is available in every country where
we operate
except Germany, the United Kingdom, Ireland and Singapore. In Canada,
the
product is marketed as Nutriversal.
|
•
|
SoySentials
is a nutritional supplement containing soy as well as other vitamins,
minerals and herbs designed for use by women. SoySentials provides
a woman
with key nutrients targeted to promote women’s health and ease the
symptoms of menopause and PMS. SoySentials is available in the
United
States, Canada, the United Kingdom, Ireland and
Mexico.
|
•
|
CardioSentials
is a berry-flavored nutritional supplement introduced in February
2005
that promotes heart health. The product contains 1,500 mg of
phytosterols per serving, policosanol and several powerful antioxidants.
In a clinical study of this product, participants experienced meaningful
reductions in cholesterol as well as improvement in their high-density
lipoprotein, or HDL, and low-density lipoprotein, or LDL, ratios.
We have
applied for a U.S. patent on CardioSentials. CardioSentials is
available only in the United
States.
|
•
|
Arthaffect
is a patented nutritional supplement containing Arthred, a patented
form
of hydrolyzed collagen protein, which is clinically reported to
support
healthy joint function. The product is available in the United
States,
Australia, New Zealand, Mexico, the Philippines and Canada. The
product is
marketed as A-Affect in Australia, New Zealand and Canada due to
local
product regulations.
|
•
|
FibRestore
is a patented nutritional supplement containing fiber, vitamins,
minerals
and herbs. A modified version of the FibRestore formula is marketed
in
Canada under the name Herbal Harmony to comply with Canada’s nutritional
regulations. FibRestore is available in all of the countries in
which we
operate.
|
•
|
Our
Slimplicity Weight Loss System was introduced in the United States
in
February 2007 and includes our two newest products: (1) Slimplicity
meal
replacement and (2) Slimplicity accelerator capsules. Our Slimplicity
Weight Loss System incorporates these new products into an overall
program
that includes proper diet and exercise and is focused on facilitating
weight loss and developing healthier lifestyle choices. Slimplicity
is
currently available in the United States, Germany, Austria, the
Netherlands, Ireland and the United Kingdom. In our European markets,
we
offer chewable tablets instead of capsules in light of local preferences
and formula modifications required to comply with product
regulations.
|
•
|
Reliv
Ultrim-Plus is designed as a meal replacement (for a maximum of
two meals
per day) for use in a weight loss program. Reliv Ultrim-Plus is
sold in
Australia, New Zealand, Canada, Malaysia, Mexico, Philippines and
Singapore. Reliv Ultrim-Plus is no longer available in the United
States,
Germany, the Netherlands, Austria, Ireland and the United Kingdom
due to
the introduction of our Slimplicity meal replacement product. We
expect
Slimplicity to eventually replace Reliv Ultrim-Plus in all of our
markets
as we introduce our Slimplicity Weight Loss System in each
market.
|
•
|
Cellebrate
is a patented weight loss aid designed to suppress appetite, curb
the
storage of body fat, and facilitate the body’s fat burning process.
Cellebrate is available in the United States and Canada.
|
•
|
Innergize!
is a patented sports supplement, containing vitamins and minerals
designed
for performance enhancement. Innergize! is available in every country
where we operate. In Canada, the product is marketed as Optain
due to
local product regulations.
|
•
|
ProVantage
is a nutritional supplement containing soy designed to enhance
athletic
performance with a balance of nutrients needed to improve endurance,
muscle recovery and repair. ProVantage is designed to increase
muscle
recovery, muscle mass and function, reduce fatigue and burn excess
body
fat for extra energy. The product also benefits dieters and others
seeking
to increase their soy intake. We have applied for a U.S. patent on
ProVantage. ProVantage is available in the United States and Canada.
|
•
|
Balanced
Cleansing Gel
|
•
|
Total
Body Renewal Lotion
|
•
|
Smooth
and Lift Serum
|
•
|
Daily
Skin Defense
|
•
|
Eye
Renewal Cream
|
•
|
Nightly
Skin Restore
|
•
|
Rich
Cleansing Bar
|
Designation
|
Discount | |
Retail
Distributor
|
20%
|
|
Affiliate
|
25%
|
|
Key
Affiliate
|
30%
|
|
Senior
Affiliate
|
35%
|
|
Master
Affiliate
|
40%
(1)
|
|
Director
|
40%
(1)
|
|
Key
Director
|
40%
(1)
|
|
Senior
Director
|
40%
(1)
|
|
Master
Director
|
40%
(1)
|
|
Presidential
Director
|
40%
(1)
|
(1) |
In
addition to discounts, these levels also receive commissions based
on
downline sales by Master Affiliates and above that they sponsor.
|
•
|
During
2007, we sponsored approximately 45 training schools on a quarterly
basis
across all of our markets for new Master Affiliates;
|
•
|
In
the United States, we annually sponsor regional distributor
conferences.
|
•
|
For
each market in which we operate, we sponsor an annual conference
for
distributors; and
|
•
|
In
the United States, we sponsor an annual International Conference
for all
distributors.
|
Country
|
Year
Entered
|
United
States
|
1988
|
Australia
|
1991
|
New
Zealand
|
1992
|
Canada
|
1992
|
Mexico
|
1993
|
United
Kingdom(1)
|
1995
|
Philippines
|
2000
|
Malaysia
|
2003
|
Ireland
|
2003
|
Singapore
|
2004
|
Germany
|
2005
|
Austria
|
2006
|
Netherlands
|
2006
|
(1) |
Includes
Great Britain, Scotland, Wales and Northern Ireland.
|
•
|
help
ensure that our network marketing system and products comply with
all
applicable regulations;
|
•
|
help
establish favorable public relations in the new market by acting
as an
intermediary between us and local regulatory authorities, public
officials
and business people; and
|
•
|
explain
our products and product ingredients to appropriate regulators
and, when
necessary, to arrange for local technicians to conduct required
ingredient
analysis tests of the products.
|
•
|
the
safety and quality of our products and ingredients;
|
•
|
the
safety and quality of similar products and ingredients distributed
by
other companies;
|
•
|
regulatory
investigations of us, our competitors and our respective products;
|
•
|
the
actions of our current or former distributors;
|
•
|
our
network marketing program; and
|
•
|
the
network marketing business generally.
|
•
|
accurately
anticipate customer needs;
|
•
|
innovate
and develop new products or product enhancements that meet these
needs;
|
•
|
successfully
commercialize new products or product enhancements in a timely
manner;
|
•
|
price
our products competitively;
|
•
|
manufacture
and deliver our products in sufficient volumes and in a timely
manner; and
|
•
|
differentiate
our product offerings from those of our competitors.
|
•
|
fluctuations
in our quarterly operating and earnings per share results;
|
•
|
material
developments with respect to future acquisitions;
|
•
|
loss
of key personnel and key distributors;
|
•
|
announcements
of technological innovations or new products by us or our competitors;
|
•
|
delays
in the development and introduction of new products;
|
•
|
our
failure to timely address changing customer or distributor preferences;
|
•
|
legislative
or regulatory changes;
|
•
|
general
trends in the industry;
|
•
|
recommendations
and/or changes in estimates by equity and market research analysts;
|
•
|
biological
or medical discoveries;
|
•
|
disputes
and/or developments concerning intellectual property, including
patents
and litigation matters;
|
•
|
sales
of common stock by our existing holders, in particular sales by
management;
|
•
|
securities
class action or other litigation;
|
•
|
developments
in our relationships with current or future distributors, customers
or
suppliers; and
|
•
|
general
economic conditions, both in the United States and abroad.
|
Location
|
Nature
of Use
|
Square
Feet
|
Owned/Leased
|
|||||||
Chesterfield,
MO, USA
|
corporate
headquarters/call center/manufacturing/warehouse
|
126,000
|
Owned
|
|||||||
Seven
Hills (Sydney), Australia
|
central
office/ warehouse/distribution
|
8,900
|
Leased
|
|||||||
Oakville,
Ontario, Canada
|
warehouse/distribution
|
2,100
|
Leased
|
|||||||
Mexico
City, Mexico
|
central
office/ warehouse/distribution
|
28,000
|
Leased
|
|||||||
Makati
City (Manila), Philippines
|
central
office/ warehouse/distribution
|
8,100
|
Leased
|
|||||||
Birmingham,
England, UK
|
central
office/ warehouse/distribution
|
2,200
|
Leased
|
|||||||
Petaling
Jaya, Malaysia
|
central
office/call center
|
6,500
|
Leased
|
|||||||
Dietzenbach
(Frankfurt), Germany
|
central
office/ warehouse/distribution
|
8,300
|
Leased
|
High
|
Low
|
Dividend
|
||||||||
Year
Ending December 31, 2007
|
||||||||||
Fourth
Quarter
|
$
|
10.07
|
$
|
7.50
|
$
|
0.05
|
||||
Third
Quarter
|
11.60
|
8.94
|
-
|
|||||||
Second
Quarter
|
11.56
|
9.53
|
0.05
|
|||||||
First
Quarter
|
11.49
|
8.57
|
-
|
|||||||
Year
Ending December 31, 2006
|
||||||||||
Fourth
Quarter
|
10.25
|
8.10
|
0.05
|
|||||||
Third
Quarter
|
10.37
|
6.46
|
-
|
|||||||
Second
Quarter
|
12.86
|
9.14
|
0.05
|
|||||||
First
Quarter
|
18.69
|
11.00
|
-
|
Base
Period
|
|||||||
|
|
12/02
|
12/03
|
12/04
|
12/05
|
12/06
|
12/07
|
Reliv'
International, Inc.
|
100.00
|
137.34
|
241.48
|
358.84
|
238.65
|
227.72
|
|
NASDAQ
Composite
|
100.00
|
149.75
|
164.64
|
168.60
|
187.83
|
205.22
|
|
Peer
Group
|
100.00
|
319.51
|
468.30
|
441.49
|
501.29
|
331.01
|
Year
Ended
December
31,
|
||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
Statements
of Operations Data:
|
||||||||||||||||
Product
sales
|
$
|
99,465,246
|
$
|
105,497,420
|
$
|
102,045,383
|
$
|
87,565,109
|
$
|
69,679,404
|
||||||
Handling
and freight income
|
11,592,258
|
11,969,737
|
11,519,781
|
9,417,324
|
7,280,319
|
|||||||||||
Net
sales
|
111,057,504
|
117,467,157
|
113,565,164
|
96,982,433
|
76,959,723
|
|||||||||||
Costs
and expenses:
|
||||||||||||||||
Cost
of products sold
|
19,100,527
|
19,519,904
|
19,264,347
|
16,662,935
|
13,228,050
|
|||||||||||
Distributor
royalties and commissions
|
44,298,744
|
47,127,026
|
45,479,062
|
38,622,537
|
29,916,744
|
|||||||||||
Selling,
general, and administrative
|
40,363,322
|
38,716,529
|
36,348,526
|
32,710,657
|
26,438,447
|
|||||||||||
Total
costs and expenses
|
103,762,593
|
105,363,459
|
101,091,935
|
87,996,129
|
69,583,241
|
|||||||||||
Income
from operations
|
7,294,911
|
12,103,698
|
12,473,229
|
8,986,304
|
7,376,482
|
|||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income
|
634,446
|
692,595
|
238,473
|
118,467
|
91,038
|
|||||||||||
Interest
expense
|
(1,373
|
)
|
(50,156
|
)
|
(313,329
|
)
|
(243,118
|
)
|
(234,956
|
)
|
||||||
Other
income
|
314,131
|
256,966
|
101,043
|
146,036
|
66,876
|
|||||||||||
Total
other income (expense)
|
947,204
|
899,405
|
26,187
|
21,385
|
(77,042
|
)
|
||||||||||
Income
before income taxes
|
8,242,115
|
13,003,103
|
12,499,416
|
9,007,689
|
7,299,440
|
|||||||||||
Provision
for income taxes
|
3,201,000
|
5,105,000
|
4,978,000
|
3,621,000
|
2,902,000
|
|||||||||||
Net
income
|
5,041,115
|
7,898,103
|
7,521,416
|
5,386,689
|
4,397,440
|
|||||||||||
Preferred
dividends accrued and paid
|
—
|
—
|
—
|
12,292
|
56,762
|
|||||||||||
Net
income available to common shareholders
|
$
|
5,041,115
|
$
|
7,898,103
|
$
|
7,521,416
|
$
|
5,374,397
|
$
|
4,340,678
|
||||||
Earnings
per common share - Basic
|
$
|
0.31
|
$
|
0.48
|
$
|
0.47
|
$
|
0.34
|
$
|
0.29
|
||||||
Weighted
average shares
|
16,094,000
|
16,465,000
|
15,885,000
|
15,662,000
|
14,969,000
|
|||||||||||
Earnings
per common share - Diluted
|
$
|
0.31
|
$
|
0.47
|
$
|
0.46
|
$
|
0.31
|
$
|
0.26
|
||||||
Weighted
average shares
|
16,303,000
|
16,727,000
|
16,388,000
|
17,137,000
|
16,706,000
|
|||||||||||
Cash
dividends declared per common share
|
$
|
0.100
|
$
|
0.100
|
$
|
0.075
|
$
|
0.065
|
$
|
—
|
As
of December 31,
|
||||||||||||||||
Balance
Sheet Data:
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
Cash
and cash equivalents
|
$
|
11,694,699
|
$
|
9,332,810
|
$
|
5,653,594
|
$
|
10,151,503
|
$
|
7,902,508
|
||||||
Working
capital
|
12,513,543
|
16,229,922
|
3,963,741
|
11,466,647
|
7,256,295
|
|||||||||||
Total
assets
|
33,606,771
|
37,282,220
|
25,981,423
|
30,996,667
|
24,680,916
|
|||||||||||
Long-term
debt, less current maturities
|
—
|
—
|
2,211,065
|
3,357,691
|
3,700,138
|
|||||||||||
Total
stockholders’ equity
|
23,805,201
|
27,733,851
|
12,564,828
|
18,190,753
|
13,072,378
|
Year
ended December 31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||
Costs
and expenses:
|
||||||||||
Cost
of products sold
|
17.2
|
16.6
|
17.0
|
|||||||
Distributor
royalties and commissions
|
39.9
|
40.1
|
40.0
|
|||||||
Selling,
general and administrative
|
36.3
|
33.0
|
32.7
|
|||||||
Income
from operations
|
6.6
|
10.3
|
11.0
|
|||||||
Interest
income
|
0.5
|
0.6
|
0.2
|
|||||||
Interest
expense
|
(0.0
|
)
|
(0.0
|
)
|
(0.3
|
)
|
||||
Other
income
|
0.3
|
0.2
|
0.1
|
|||||||
Income
before income taxes
|
7.4
|
11.1
|
11.0
|
|||||||
Provision
for income taxes
|
2.9
|
4.4
|
4.4
|
|||||||
Net
income
|
4.5
|
%
|
6.7
|
%
|
6.6
|
%
|
Year
Ended December 31,
|
|||||||||||||||||||||||
2007
|
2006
|
Change
from prior year
|
|||||||||||||||||||||
Amount
|
%
of Net Sales
|
Amount
|
%
of Net Sales
|
Amount
|
%
|
||||||||||||||||||
(dollars
in thousands)
|
|||||||||||||||||||||||
United
States
|
$
|
98,348
|
|
|
88.5
|
%
|
$
|
105,784
|
|
|
90.0
|
%
|
$
|
(7,436
|
)
|
|
(7.0
|
)%
|
|||||
Australia/New
Zealand
|
|
2,944
|
|
|
2.7
|
|
2,550
|
|
|
2.2
|
|
394
|
|
|
15.5
|
|
|||||||
Canada
|
|
1,634
|
|
|
1.5
|
|
1,638
|
|
|
1.4
|
|
(4
|
)
|
|
(0.2
|
)
|
|||||||
Mexico
|
|
1,526
|
|
|
1.4
|
|
1,433
|
|
|
1.2
|
|
93
|
|
|
6.5
|
||||||||
United
Kingdom/Ireland
|
|
1,062
|
|
|
1.0
|
|
1,235
|
|
|
1.1
|
|
(173
|
)
|
|
(14.0
|
)
|
|||||||
Philippines
|
|
2,942
|
|
|
2.6
|
|
2,198
|
|
|
1.9
|
|
744
|
|
|
33.8
|
||||||||
Malaysia/Singapore
|
|
1,765
|
|
|
1.5
|
|
1,805
|
|
|
1.5
|
|
(40
|
)
|
|
(2.2
|
)
|
|||||||
Germany
|
|
837
|
|
|
0.8
|
|
824
|
|
|
0.7
|
|
13
|
|
|
1.6
|
|
|||||||
Consolidated
total
|
$
|
111,058
|
|
|
100.0
|
%
|
$
|
117,467
|
|
|
100.0
|
%
|
$
|
(6,409
|
)
|
|
(5.5
|
)%
|
December
31, 2007
|
December
31, 2006
|
%
Change
|
|||||||||||||||||||||
Active
Distributors
|
Master
Affiliates and Above
|
Active
Distributors
|
Master
Affiliates and Above
|
Active
Distributors
|
Master
Affiliates and Above
|
||||||||||||||||||
United
States
|
56,920
|
|
|
13,890
|
|
52,880
|
|
|
16,580
|
|
7.6
|
%
|
|
(16.2
|
)%
|
||||||||
Australia/New
Zealand
|
|
2,450
|
|
|
280
|
|
2,460
|
|
|
300
|
|
(0.4
|
)
|
|
(6.7
|
)
|
|||||||
Canada
|
|
1,140
|
|
|
180
|
|
1,170
|
|
|
180
|
|
(2.6
|
)
|
|
0.0
|
||||||||
Mexico
|
|
1,430
|
|
|
220
|
|
1,130
|
|
|
240
|
|
26.5
|
|
|
(8.3
|
)
|
|||||||
United
Kingdom/Ireland
|
|
780
|
|
|
120
|
|
910
|
|
|
160
|
|
(14.3
|
) |
|
(25.0
|
)
|
|||||||
Philippines
|
|
4,530
|
|
|
400
|
|
3,430
|
|
|
370
|
|
32.1
|
|
|
8.1
|
||||||||
Malaysia/Singapore
|
|
2,170
|
|
|
350
|
|
2,560
|
|
|
410
|
|
(15.2
|
)
|
|
(14.6
|
)
|
|||||||
Germany
|
|
550
|
|
|
150
|
|
420
|
|
|
130
|
|
31.0
|
|
15.4
|
|||||||||
Consolidated
total
|
69,970
|
|
|
15,590
|
|
64,960
|
|
|
18,370
|
|
7.7
|
%
|
|
(15.1
|
)%
|
Year
Ended December 31,
|
|||||||||||||||||||||||
2006
|
2005
|
Change
from prior year
|
|||||||||||||||||||||
Amount
|
%
of Net Sales
|
Amount
|
%
of Net Sales
|
Amount
|
%
|
||||||||||||||||||
(dollars
in thousands)
|
|||||||||||||||||||||||
United
States
|
$
|
105,784
|
|
|
90.0
|
%
|
$
|
102,549
|
|
|
90.3
|
%
|
$
|
3,235
|
|
3.2
|
%
|
||||||
Australia/New
Zealand
|
|
2,550
|
|
|
2.2
|
|
2,215
|
|
|
2.0
|
|
335
|
|
|
15.1
|
|
|||||||
Canada
|
|
1,638
|
|
|
1.4
|
|
1,668
|
|
|
1.5
|
|
(30
|
)
|
|
(1.8
|
)
|
|||||||
Mexico
|
|
1,433
|
|
|
1.2
|
|
1,608
|
|
|
1.4
|
|
(175
|
)
|
|
(10.9
|
)
|
|||||||
United
Kingdom/Ireland
|
|
1,235
|
|
|
1.1
|
|
846
|
|
|
0.7
|
|
389
|
|
46.0
|
|||||||||
Philippines
|
|
2,198
|
|
|
1.9
|
|
2,328
|
|
|
2.0
|
|
(130
|
)
|
|
(5.6
|
)
|
|||||||
Malaysia/Singapore
|
|
1,805
|
|
|
1.5
|
|
2,031
|
|
|
1.8
|
|
(226
|
)
|
|
(11.1
|
)
|
|||||||
Germany
|
|
824
|
|
|
0.7
|
|
320
|
|
|
0.3
|
|
504
|
|
|
157.5
|
|
|||||||
Consolidated
total
|
$
|
117,467
|
|
|
100.0
|
%
|
$
|
113,565
|
|
|
100.0
|
%
|
$
|
3,902
|
|
|
3.4
|
%
|
December
31, 2006
|
December
31, 2005
|
%
Change
|
|||||||||||||||||||||
Active
Distributors
|
Master
Affiliates and Above
|
Active
Distributors
|
Master
Affiliates and Above
|
Active
Distributors
|
Master
Affiliates and Above
|
||||||||||||||||||
United
States
|
52,880
|
|
|
16,580
|
|
52,040
|
|
|
15,840
|
|
1.6
|
%
|
|
4.7
|
%
|
||||||||
Australia/New
Zealand
|
|
2,460
|
|
|
300
|
|
2,410
|
|
|
250
|
|
2.1
|
|
|
20.0
|
||||||||
Canada
|
|
1,170
|
|
|
180
|
|
1,210
|
|
|
210
|
|
(3.3
|
)
|
|
(14.3
|
)
|
|||||||
Mexico
|
|
1,130
|
|
|
240
|
|
1,630
|
|
|
310
|
|
(30.7
|
)
|
|
(22.6
|
)
|
|||||||
United
Kingdom/Ireland
|
|
910
|
|
|
160
|
|
750
|
|
|
100
|
|
21.3
|
|
60.0
|
|||||||||
Philippines
|
|
3,430
|
|
|
370
|
|
4,070
|
|
|
490
|
|
(15.7
|
)
|
|
(24.5
|
)
|
|||||||
Malaysia/Singapore
|
|
2,560
|
|
|
410
|
|
3,250
|
|
|
590
|
|
(21.2
|
)
|
|
(30.5
|
)
|
|||||||
Germany
|
|
420
|
|
|
130
|
|
120
|
|
|
50
|
|
250.0
|
|
160.0
|
|||||||||
Consolidated
total
|
64,960
|
|
|
18,370
|
|
65,480
|
|
|
17,840
|
|
(0.8
|
)%
|
|
3.0
|
%
|
(In
Thousand $’s)
|
Less
Than 1 year
|
1-3
years
|
3
- 5 years
|
More
than 5 years
|
Total
|
|||||||||
Operating
leases
|
93
|
235
|
40
|
—
|
368
|
|||||||||
Total
Obligations
|
$
|
93
|
$
|
235
|
$
|
40
|
$
|
—
|
$
|
368
|
(a)
|
1.
|
The
Consolidated Financial Statements filed as part of this report on
Form
10-K are listed on the accompanying Index to Consolidated Financial
Statements and Consolidated Financial Statement
Schedules.
|
2.
|
Financial
schedules required to be filed by Item 8 of this form, and by Item
15(d)
below:
|
Schedule
II
|
Valuation
and qualifying accounts
|
3.
|
Exhibits:
|
Exhibit
Number
|
Document
|
3.1 |
Second
Amended and Restated Certificate of Incorporation (incorporated by
reference to Appendix B of Schedule 14A of the Registrant filed on
April
17, 2003).
|
3.2
|
By-Laws
(incorporated by reference to the Registration Statement on Form
S-3 of
the Registrant filed on February 21,
2006).
|
3.3
|
Amendment
to By-Laws dated March 22, 2001 (incorporated by reference to the
Registration Statement on Form S-3 of the Registrant filed on February
21,
2006).
|
3.4
|
Certificate
of Designation to Create a Class of Series A Preferred Stock for
Reliv'
International, Inc. (incorporated by reference to Exhibit 3.1 to
the Form
10-Q of the Registrant for quarter ended March 31,
2003).
|
4.1
|
Form
of Reliv International, Inc. common stock certificate (incorporated
by
reference to the Registration Statement on Form S-3 of the Registrant
filed on February 21, 2006).
|
10.1
|
Amended
Exclusive License Agreement with Theodore P. Kalogris dated December
1,
1991 (incorporated by reference to Exhibit 10.1 to the Form 10-K
of the
Registrant for the year ended December 31,
1992).
|
10.2*
|
Robert
L. Montgomery Employment Agreement dated June 19, 2007 (incorporated
by
reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
June 25,
2007).
|
10.3*
|
Carl
W. Hastings Employment Agreement dated July 26, 2007 (incorporated
by
reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
July 27,
2007).
|
10.4
|
Letter
Agreement with Southwest Bank of St. Louis dated June 28, 2006
(incorporated by reference to Exhibit 10.1 to the Form 10-Q of the
Registrant for the quarter ended June 30,
2006).
|
10.5 |
Promissory
Note with Southwest Bank of St. Louis dated June 28, 2006 (incorporated
by
reference
to Exhibit 10.2 to the Form 10-Q of the Registrant for the quarter
ended
June 30, 2006).
|
10.6*
|
Reliv’
International, Inc. Supplemental Executive Retirement Plan dated
June 1,
1998 (incorporated by reference to Exhibit 10.19 to the Form10-K
of the
Registrant for year ended December 31,
1998).
|
10.7* |
Reliv
International, Inc. Employee Stock Ownership Plan and Trust dated
August
24, 2006 (incorporated by reference to Exhibit 10.1 to the Form 8-K
of the
Registrant filed August 30, 2006).
|
10.8 |
Agreement
with Hydron Technologies, Inc. dated March 1, 2001 (incorporated
by
reference to Exhibit
10.16 to the Form 10-K of the Registrant for year ended December
31,
2001).
|
10.9*
|
Amended
and Restated Distributor Stock Purchase Plan (incorporated by reference
to
Form S-8 Registration Statement the Registrant filed May 9,
2002).
|
10.10*
|
2003
Stock Option Plan (incorporated by reference to Form S-8 Registration
Statement the Registrant filed August 13,
2003).
|
10.11*
|
Reliv
International, Inc. Incentive Compensation Plan effective January
1, 2007
(incorporated by reference to Exhibit 10.1 to the Form 8-K of the
Registrant filed May 31, 2007).
|
10.12*
|
Stock
Redemption Agreement with David G. Kreher and Pamela S. Kreher dated
March
14, 2005 (incorporated by reference to Exhibit 10.18 to the Form
10-K of
the Registrant for the year ended December 31,
2004).
|
10.13*
|
Kreher
Employment Agreement dated March 14, 2005 (incorporated by reference
to
Exhibit 10.19 to the Form 10-K of the Registrant for the year ended
December 31, 2004).
|
10.14*
|
R.
Scott Montgomery Employment Agreement dated January 2, 2008 (incorporated
by reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
January 4, 2008).
|
10.15*
|
Ryan
A. Montgomery Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.2 to the Form 8-K of the Registrant filed
January
4, 2008).
|
10.16*
|
Steven
G. Hastings Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.3 to the Form 8-K of the Registrant filed
January
4, 2008).
|
10.17*
|
Steven
D. Albright Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.4 to the Form 8-K of the Registrant filed
January
4, 2008).
|
10.18*
|
Brett
M. Hastings Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.5 to the Form 8-K of the Registrant filed
January
4, 2008).
|
11 |
Statement
re: computation of per share earnings (incorporated by reference
to Note 8
of the Consolidated Financial Statements contained in Part
IV).
|
21
|
Subsidiaries
of the Registrant (filed herewith).
|
23
|
Consent
of Ernst & Young LLP, Independent Auditors (filed
herewith).
|
31.1
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
of the Securities Exchange Act, as amended (filed
herewith).
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
of the Securities Exchange Act, as amended (filed
herewith).
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to
18
U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act
of 2002 (filed herewith).
|
By: |
/s/
Robert L. Montgomery
|
Robert L. Montgomery, Chairman of the Board of Directors, President and Chief Executive Officer |
By: |
/s/
Robert L. Montgomery
|
Robert L. Montgomery, Chairman of the Board of Directors, President and Chief Executive Officer |
By: |
/s/
Steven D. Albright
|
Steven D. Albright, Chief Financial Officer (and accounting officer) |
By: |
/s/
Stephen M. Merrick
|
Stephen M. Merrick, Senior Vice President, Secretary, Director |
By: |
/s/
Carl W. Hastings
|
Carl W. Hastings, Vice Chairman, Chief Scientific Officer, Director |
By: |
/s/
Donald L. McCain
|
Donald L. McCain, Director |
By: |
/s/
John B. Akin
|
John B. Akin, Director |
By: |
/s/
Robert M. Henry
|
Robert M. Henry, Director |
By: |
/s/
Denis St. John
|
Denis St. John, Director |
By: |
/s/
Michael D. Smith
|
Michael D. Smith, Director |
By: |
/s/Patrick
G. Doherty
|
Patrick G. Doherty, Director |
Exhibit
Number
|
Document
|
3.1 |
Second
Amended and Restated Certificate of Incorporation (incorporated
by
reference to Appendix B of Schedule 14A of the Registrant filed
on April
17, 2003).
|
3.2
|
By-Laws
(incorporated by reference to the Registration Statement on Form
S-3 of
the Registrant filed on February 21,
2006).
|
3.3
|
Amendment
to By-Laws dated March 22, 2001 (incorporated by reference to the
Registration Statement on Form S-3 of the Registrant filed on February
21,
2006).
|
3.4
|
Certificate
of Designation to Create a Class of Series A Preferred Stock for
Reliv'
International, Inc. (incorporated by reference to Exhibit 3.1 to
the Form
10-Q of the Registrant for quarter ended March 31,
2003).
|
4.1
|
Form
of Reliv International, Inc. common stock certificate (incorporated
by
reference to the Registration Statement on Form S-3 of the Registrant
filed on February 21, 2006).
|
10.1
|
Amended
Exclusive License Agreement with Theodore P. Kalogris dated December
1,
1991 (incorporated by reference to Exhibit 10.1 to the Form 10-K
of the
Registrant for the year ended December 31,
1992).
|
10.2*
|
Robert
L. Montgomery Employment Agreement dated June 19, 2007 (incorporated
by
reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
June 25,
2007).
|
10.3*
|
Carl
W. Hastings Employment Agreement dated July 26, 2007 (incorporated
by
reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
July 27,
2007).
|
10.4
|
Letter
Agreement with Southwest Bank of St. Louis dated June 28, 2006
(incorporated by reference to Exhibit 10.1 to the Form 10-Q of
the
Registrant for the quarter ended June 30,
2006).
|
10.5 |
Promissory
Note with Southwest Bank of St. Louis dated June 28, 2006 (incorporated
by
reference
to Exhibit 10.2 to the Form 10-Q of the Registrant for the quarter
ended
June 30, 2006).
|
10.6*
|
Reliv’
International, Inc. Supplemental Executive Retirement Plan dated
June 1,
1998 (incorporated by reference to Exhibit 10.19 to the Form10-K
of the
Registrant for year ended December 31,
1998).
|
10.7* |
Reliv
International, Inc. Employee Stock Ownership Plan and Trust dated
August
24, 2006 (incorporated by reference to Exhibit 10.1 to the Form
8-K of the
Registrant filed August 30, 2006).
|
10.8 |
Agreement
with Hydron Technologies, Inc. dated March 1, 2001 (incorporated
by
reference to Exhibit
10.16 to the Form 10-K of the Registrant for year ended December
31,
2001).
|
10.9*
|
Amended
and Restated Distributor Stock Purchase Plan (incorporated by reference
to
Form S-8 Registration Statement the Registrant filed May 9,
2002).
|
10.10*
|
2003
Stock Option Plan (incorporated by reference to Form S-8 Registration
Statement the Registrant filed August 13,
2003).
|
10.11*
|
Reliv
International, Inc. Incentive Compensation Plan effective January
1, 2007
(incorporated by reference to Exhibit 10.1 to the Form 8-K of the
Registrant filed May 31, 2007).
|
10.12*
|
Stock
Redemption Agreement with David G. Kreher and Pamela S. Kreher
dated March
14, 2005 (incorporated by reference to Exhibit 10.18 to the Form
10-K of
the Registrant for the year ended December 31,
2004).
|
10.13*
|
Kreher
Employment Agreement dated March 14, 2005 (incorporated by reference
to
Exhibit 10.19 to the Form 10-K of the Registrant for the year ended
December 31, 2004).
|
10.14*
|
R.
Scott Montgomery Employment Agreement dated January 2, 2008 (incorporated
by reference to Exhibit 10.1 to the Form 8-K of the Registrant
filed
January 4, 2008).
|
10.15*
|
Ryan
A. Montgomery Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.2 to the Form 8-K of the Registrant filed
January
4, 2008).
|
10.16*
|
Steven
G. Hastings Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.3 to the Form 8-K of the Registrant filed
January
4, 2008).
|
10.17*
|
Steven
D. Albright Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.4 to the Form 8-K of the Registrant filed
January
4, 2008).
|
10.18*
|
Brett
M. Hastings Employment Agreement dated January 2, 2008 (incorporated
by
reference to Exhibit 10.5 to the Form 8-K of the Registrant filed
January
4, 2008).
|
11 |
Statement
re: computation of per share earnings (incorporated by reference
to Note 8
of the Consolidated Financial Statements contained in Part
IV).
|
21
|
Subsidiaries
of the Registrant (filed herewith).
|
23
|
Consent
of Ernst & Young LLP, Independent Auditors (filed
herewith).
|
31.1
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a)
of the Securities Exchange Act, as amended (filed
herewith).
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a)
of the Securities Exchange Act, as amended (filed
herewith).
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to 18
U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act
of 2002 (filed herewith).
|
Reports
of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
F-3
|
|
Consolidated
Statements of Income for the years ended
December
31, 2007, 2006, and 2005
|
F-5
|
|
Consolidated
Statements of Stockholders’ Equity for the years ended
December
31, 2007, 2006, and 2005
|
F-6
|
|
Consolidated
Statements of Cash Flows for the years ended
December
31, 2007, 2006, and 2005
|
F-7
|
|
Notes
to Consolidated Financial Statements - December
31, 2007
|
F-9
|
|
|
||
Financial
Statement Schedule:
|
|
|
Schedule
II - Valuation and Qualifying Accounts for the years ended
December
31, 2007, 2006, and 2005
|
F-32
|
December
31
|
|||||||
2007
|
2006
|
||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
11,694,699
|
$
|
9,332,810
|
|||
Short-term
investments
|
398,592
|
7,864,000
|
|||||
Accounts
and notes receivable, less allowances of $8,300 in 2007 and $6,200
in
2006
|
811,634
|
669,379
|
|||||
Accounts
due from employees and distributors
|
204,705
|
223,246
|
|||||
Inventories:
|
|||||||
Finished
goods
|
3,290,114
|
2,752,770
|
|||||
Raw
materials
|
1,630,976
|
1,337,661
|
|||||
Sales
aids and promotional materials
|
1,258,148
|
687,790
|
|||||
Total
inventories
|
6,179,238
|
4,778,221
|
|||||
Refundable
income taxes
|
362,330
|
279,096
|
|||||
Prepaid
expenses and other current assets
|
862,172
|
1,103,996
|
|||||
Deferred
income taxes
|
574,430
|
594,430
|
|||||
Total
current assets
|
21,087,800
|
24,845,178
|
|||||
Other
assets
|
2,999,903
|
2,639,537
|
|||||
Accounts
due from employees and distributors
|
319,883
|
362,959
|
|||||
Property,
plant, and equipment
|
18,511,944
|
18,555,718
|
|||||
Less
accumulated depreciation
|
9,312,759
|
9,121,172
|
|||||
9,199,185
|
9,434,546
|
||||||
Total
assets
|
$
|
33,606,771
|
$
|
37,282,220
|
December
31
|
|||||||
2007
|
2006
|
||||||
Liabilities
and stockholders’ equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable and accrued expenses
|
$
|
8,464,257
|
$
|
8,615,256
|
|||
Income
taxes payable
|
110,000
|
-
|
|||||
Total
current liabilities
|
8,574,257
|
8,615,256
|
|||||
Noncurrent
liabilities:
|
|||||||
Noncurrent
deferred income taxes
|
-
|
42,000
|
|||||
Other
noncurrent liabilities
|
1,227,313
|
891,113
|
|||||
Total
noncurrent liabilities
|
1,227,313
|
933,113
|
|||||
Stockholders’
equity:
|
|||||||
Preferred
stock, par value $0.001 per share;
3,000,000
shares authorized; -0- shares issued and
outstanding
in 2007 and 2006
|
-
|
-
|
|||||
Common
stock, par value $0.001 per share;
30,000,000
shares authorized, 15,877,179 shares
issued
and 15,873,754 shares outstanding in 2007;
16,730,465
shares issued and 16,605,523 shares
outstanding
in 2006
|
15,877
|
16,731
|
|||||
Additional
paid-in capital
|
33,100,351
|
34,732,421
|
|||||
Accumulated
deficit
|
(8,869,332
|
)
|
(5,336,866
|
)
|
|||
Accumulated
other comprehensive loss:
|
|||||||
Foreign
currency translation adjustment
|
(419,179
|
)
|
(540,653
|
)
|
|||
Treasury
stock
|
(22,516
|
)
|
(1,137,782
|
)
|
|||
Total
stockholders’ equity
|
23,805,201
|
27,733,851
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
33,606,771
|
$
|
37,282,220
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Product
sales
|
$
|
99,465,246
|
$
|
105,497,420
|
$
|
102,045,383
|
||||
Handling
& freight income
|
11,592,258
|
11,969,737
|
11,519,781
|
|||||||
Net
sales
|
111,057,504
|
117,467,157
|
113,565,164
|
|||||||
Costs
and expenses:
|
||||||||||
Cost
of products sold
|
19,100,527
|
19,519,904
|
19,264,347
|
|||||||
Distributor
royalties and commissions
|
44,298,744
|
47,127,026
|
45,479,062
|
|||||||
Selling,
general, and administrative
|
40,363,322
|
38,716,529
|
36,348,526
|
|||||||
Income
from operations
|
7,294,911
|
12,103,698
|
12,473,229
|
|||||||
Other
income (expense):
|
||||||||||
Interest
income
|
634,446
|
692,595
|
238,473
|
|||||||
Interest
expense
|
(1,373
|
)
|
(50,156
|
)
|
(313,329
|
)
|
||||
Other
income
|
314,131
|
256,966
|
101,043
|
|||||||
Income
before income taxes
|
8,242,115
|
13,003,103
|
12,499,416
|
|||||||
Provision
for income taxes
|
3,201,000
|
5,105,000
|
4,978,000
|
|||||||
Net
income available to common
|
||||||||||
shareholders
|
$
|
5,041,115
|
$
|
7,898,103
|
$
|
7,521,416
|
||||
Earnings
per common share - Basic
|
$
|
0.31
|
$
|
0.48
|
$
|
0.47
|
||||
Weighted
average shares
|
16,094,000
|
16,465,000
|
15,885,000
|
|||||||
Earnings
per common share - Diluted
|
$
|
0.31
|
$
|
0.47
|
$
|
0.46
|
||||
Weighted
average shares
|
16,303,000
|
16,727,000
|
16,388,000
|
|
|
|
|
Accumulated
|
|
|
|
||||||||||||||||||
|
|
Additional
|
|
Other
|
|
|
|
||||||||||||||||||
Common
Stock
|
Paid-In
|
Accumulated
|
Comprehensive
|
Treasury
Stock
|
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Loss
|
Shares
|
Amount
|
Total
|
||||||||||||||||||
Balance
at December 31, 2004
|
|
16,323,668
|
$
|
16,324
|
$
|
22,661,179
|
$
|
(3,719,711
|
)
|
$
|
(758,331
|
)
|
|
2,737
|
$
|
(8,708
|
)
|
$
|
18,190,753
|
||||||
Net
income
|
-
|
-
|
7,521,416
|
-
|
-
|
-
|
7,521,416
|
||||||||||||||||||
Other
comprehensive income:
|
|||||||||||||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
88,985
|
-
|
-
|
88,985
|
|||||||||||||||||
Total
comprehensive income
|
7,610,401
|
||||||||||||||||||||||||
Common
stock dividends paid, $0.075 per share
|
-
|
-
|
-
|
(1,188,288
|
)
|
-
|
-
|
-
|
(1,188,288
|
)
|
|||||||||||||||
Warrants
granted under DSPP
|
-
|
-
|
66,674
|
-
|
-
|
-
|
-
|
66,674
|
|||||||||||||||||
Common
stock purchased for treasury
|
-
|
-
|
-
|
-
|
-
|
1,460,155
|
(13,790,375
|
)
|
(13,790,375
|
)
|
|||||||||||||||
Retirement
of treasury stock
|
(1,410,698
|
)
|
(1,411
|
)
|
(1,746,357
|
)
|
(11,539,012
|
)
|
-
|
(1,410,698
|
)
|
13,286,780
|
-
|
||||||||||||
Proceeds
from sale of treasury stock
|
-
|
-
|
22,547
|
-
|
-
|
(2,112
|
)
|
10,813
|
33,360
|
||||||||||||||||
Options
and warrants exercised
|
700,674
|
701
|
598,420
|
(326,818
|
)
|
-
|
-
|
-
|
272,303
|
||||||||||||||||
Tax
benefit from exercise of options and warrants
|
-
|
-
|
1,370,000
|
-
|
-
|
-
|
-
|
1,370,000
|
|||||||||||||||||
Balance
at December 31, 2005
|
15,613,644
|
15,614
|
22,972,463
|
(9,252,413
|
)
|
(669,346
|
)
|
50,082
|
(501,490
|
)
|
12,564,828
|
||||||||||||||
Net
income
|
-
|
-
|
-
|
7,898,103
|
-
|
-
|
-
|
7,898,103
|
|||||||||||||||||
Other
comprehensive income:
|
|||||||||||||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
128,693
|
-
|
-
|
128,693
|
|||||||||||||||||
Total
comprehensive income
|
8,026,796
|
||||||||||||||||||||||||
Common
stock dividends paid, $0.100 per share
|
-
|
-
|
-
|
(1,675,582
|
)
|
-
|
-
|
-
|
(1,675,582
|
)
|
|||||||||||||||
Warrants
granted under DSPP
|
-
|
-
|
102,224
|
-
|
-
|
-
|
-
|
102,224
|
|||||||||||||||||
Employee
stock-based compensation
|
-
|
-
|
62,991
|
-
|
-
|
-
|
-
|
62,991
|
|||||||||||||||||
Common
stock purchased for treasury
|
-
|
-
|
-
|
-
|
-
|
416,487
|
(3,602,531
|
)
|
(3,602,531
|
)
|
|||||||||||||||
Retirement
of treasury stock
|
(341,627
|
)
|
(342
|
)
|
(707,608
|
)
|
(2,258,289
|
)
|
-
|
(341,627
|
)
|
2,966,239
|
-
|
||||||||||||
Proceeds
from issuance of common stock, net
|
1,200,000
|
1,200
|
11,917,592
|
-
|
-
|
-
|
-
|
11,918,792
|
|||||||||||||||||
Options
and warrants exercised
|
258,448
|
259
|
262,451
|
(48,685
|
)
|
-
|
-
|
-
|
214,025
|
||||||||||||||||
Tax
benefit from exercise of options and warrants
|
-
|
-
|
122,308
|
-
|
-
|
-
|
-
|
122,308
|
|||||||||||||||||
Balance
at December 31, 2006
|
16,730,465
|
|
16,731
|
|
34,732,421
|
|
(5,336,866
|
)
|
|
(540,653
|
)
|
124,942
|
|
(1,137,782
|
)
|
|
27,733,851
|
||||||||
Net
income
|
-
|
-
|
-
|
5,041,115
|
-
|
-
|
-
|
5,041,115
|
|||||||||||||||||
Other
comprehensive income:
|
|||||||||||||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
121,474
|
-
|
-
|
121,474
|
|||||||||||||||||
Total
comprehensive income
|
5,162,589
|
||||||||||||||||||||||||
Common
stock dividends paid, $0.100 per share
|
-
|
-
|
-
|
(1,600,621
|
)
|
-
|
-
|
-
|
(1,600,621
|
)
|
|||||||||||||||
Warrants
granted under DSPP
|
-
|
-
|
80,026
|
-
|
-
|
-
|
-
|
80,026
|
|||||||||||||||||
Employee
stock-based compensation
|
-
|
-
|
75,151
|
-
|
-
|
-
|
-
|
75,151
|
|||||||||||||||||
Common
stock purchased for treasury
|
-
|
-
|
-
|
-
|
-
|
752,491
|
(7,677,124
|
)
|
(7,677,124
|
)
|
|||||||||||||||
Retirement
of treasury stock
|
(874,008
|
)
|
(874
|
)
|
(1,818,556
|
)
|
(6,972,960
|
)
|
-
|
(874,008
|
)
|
8,792,390
|
-
|
||||||||||||
Options
and warrants exercised
|
28,722
|
28
|
83,469
|
-
|
-
|
-
|
-
|
83,497
|
|||||||||||||||||
Other
|
(8,000
|
)
|
(8
|
)
|
(52,160
|
)
|
-
|
-
|
-
|
-
|
(52,168
|
)
|
|||||||||||||
Balance
at December 31, 2007
|
15,877,179
|
$
|
15,877
|
$
|
33,100,351
|
$
|
(8,869,332
|
)
|
$
|
(419,179
|
)
|
3,425
|
$
|
(22,516
|
)
|
$
|
23,805,201
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Operating
activities
|
||||||||||
Net
income
|
$
|
5,041,115
|
$
|
7,898,103
|
$
|
7,521,416
|
||||
Adjustments
to reconcile net income to net
|
||||||||||
cash
provided by operating activities:
|
||||||||||
Depreciation
and amortization
|
1,114,974
|
1,243,407
|
1,417,166
|
|||||||
Stock-based
compensation
|
155,177
|
165,215
|
66,674
|
|||||||
Tax
benefit from exercise of options
|
-
|
-
|
1,370,000
|
|||||||
Deferred
income taxes
|
(40,000
|
)
|
(189,000
|
)
|
(366,000
|
)
|
||||
Foreign
currency transaction (gain)/loss
|
(118,718
|
)
|
(194,760
|
)
|
268,436
|
|||||
(Increase)
decrease in accounts and notes receivable
|
(50,098
|
)
|
52,869
|
(108,587
|
)
|
|||||
(Increase)
decrease in inventories
|
(1,286,334
|
)
|
896,792
|
327,447
|
||||||
(Increase)
decrease in refundable income taxes
|
(90,923
|
)
|
(260,035
|
)
|
1,288,260
|
|||||
(Increase)
decrease in prepaid expenses and other
|
||||||||||
current
assets
|
268,442
|
154,428
|
(173,057
|
)
|
||||||
Increase
in other assets
|
(430,747
|
)
|
(49,677
|
)
|
(465,991
|
)
|
||||
Increase
in accounts payable and accrued expenses
|
90,397
|
63,346
|
538,723
|
|||||||
Increase
(decrease) in income taxes payable
|
110,000
|
(821,571
|
)
|
819,344
|
||||||
Net
cash provided by operating activities
|
4,763,285
|
8,959,117
|
12,503,831
|
|||||||
Investing
activities
|
||||||||||
Proceeds
from sale of property, plant, and equipment
|
4,847
|
97,117
|
148,506
|
|||||||
Purchase
of property, plant, and equipment
|
(841,193
|
)
|
(572,748
|
)
|
(1,710,523
|
)
|
||||
Purchase
of investments
|
(1,398,592
|
)
|
(8,974,000
|
)
|
-
|
|||||
Proceeds
from sales or maturities of investments, at cost
|
8,864,000
|
110,000
|
-
|
|||||||
Net
cash provided by (used in) investing activities
|
6,629,062
|
(9,339,631
|
)
|
(1,562,017
|
)
|
|||||
Financing
activities
|
||||||||||
Principal
payments on long-term borrowings and line of
|
||||||||||
credit
|
-
|
(3,127,344
|
)
|
(3,655,514
|
)
|
|||||
Net
proceeds from issuance of common stock
|
-
|
11,918,792
|
-
|
|||||||
Common
stock dividends paid
|
(1,600,621
|
)
|
(1,675,582
|
)
|
(1,188,288
|
)
|
||||
Proceeds
from options and warrants exercised
|
83,497
|
214,025
|
273,520
|
|||||||
Excess
tax benefits from stock-based compensation
|
-
|
103,182
|
-
|
|||||||
Purchase
of stock for treasury
|
(7,677,124
|
)
|
(3,602,531
|
)
|
(10,690,375
|
)
|
||||
Proceeds
from sale of treasury stock
|
-
|
-
|
33,360
|
|||||||
Net
cash provided by (used in) financing activities
|
(9,194,248
|
)
|
3,830,542
|
(15,227,297
|
)
|
|||||
Effect
of exchange rate changes on cash and cash
|
||||||||||
equivalents
|
163,790
|
229,188
|
(212,426
|
)
|
||||||
Increase
(decrease) in cash and cash equivalents
|
2,361,889
|
3,679,216
|
(4,497,909
|
)
|
||||||
Cash
and cash equivalents at beginning of year
|
9,332,810
|
5,653,594
|
10,151,503
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
11,694,699
|
$
|
9,332,810
|
$
|
5,653,594
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Supplemental
disclosures of cash flow information:
|
||||||||||
Cash
paid during the year for:
|
||||||||||
Interest
|
$
|
1,373
|
$
|
81,156
|
$
|
300,329
|
||||
Income
taxes
|
$
|
3,036,000
|
$
|
6,262,000
|
$
|
1,838,000
|
||||
Noncash
investing and financing transactions:
|
||||||||||
Issuance
of promissory notes for purchase
|
||||||||||
of
stock for treasury
|
$
|
-
|
$
|
-
|
$
|
4,050,000
|
Year
ended
December
31
|
||||
2005
|
||||
Basic:
|
||||
Net
income available to common
|
||||
shareholders,
as reported
|
$
|
7,521,416
|
||
Deduct:
total stock-based employee compensation
|
||||
expense
determined under fair value-based method
|
||||
for
all awards, net of related tax effects
|
1,645,036
|
|||
Pro
forma net income available to common
|
||||
shareholders
|
$
|
5,876,380
|
||
Diluted:
|
||||
Net
income available to common shareholders,
|
||||
as
reported
|
$
|
7,521,416
|
||
Deduct:
total stock-based employee compensation
|
||||
expense
determined under fair value-based method
|
||||
for
all awards, net of related tax effects
|
1,645,036
|
|||
Pro
forma net income available to common
|
||||
shareholders
|
$
|
5,876,380
|
||
Earnings
per share:
|
||||
Basic—as
reported
|
$
|
0.47
|
||
Basic—pro
forma
|
$
|
0.37
|
||
|
||||
Diluted—as
reported
|
$
|
0.46
|
||
Diluted—pro
forma
|
$
|
0.36
|
2007
|
2006
|
||||||
Land
|
$
|
829,222
|
$
|
829,222
|
|||
Building
|
9,817,692
|
9,565,221
|
|||||
Machinery
and equipment
|
3,673,515
|
4,199,714
|
|||||
Office
equipment
|
1,525,905
|
1,520,297
|
|||||
Computer
equipment and software
|
2,665,610
|
2,441,264
|
|||||
18,511,944
|
18,555,718
|
||||||
Less
accumulated depreciation
|
9,312,759
|
9,121,172
|
|||||
$
|
9,199,185
|
$
|
9,434,546
|
2007
|
2006
|
||||||
Trade
payables
|
$
|
4,288,481
|
$
|
3,824,951
|
|||
Distributors'
commissions
|
3,285,270
|
3,449,687
|
|||||
Sales
taxes
|
390,585
|
421,923
|
|||||
Payroll
and payroll taxes
|
499,921
|
918,695
|
|||||
$
|
8,464,257
|
$
|
8,615,256
|
Unrealized
|
Recorded
|
Cash
and
|
Short-term
|
|||||||||||||
Cost
|
gains
/ (losses)
|
basis
|
cash
equivalents
|
investments
|
||||||||||||
Cash
|
$
|
7,670,244
|
$
|
-
|
$
|
7,670,244
|
$
|
7,670,244
|
||||||||
Certificates
of deposit
|
4,423,047
|
-
|
4,423,047
|
4,024,455
|
398,592
|
|||||||||||
$
|
12,093,291
|
$
|
-
|
$
|
12,093,291
|
$
|
11,694,699
|
$
|
398,592
|
Unrealized
|
Recorded
|
Cash
and
|
Short-term
|
|||||||||||||
Cost
|
gains
/ (losses)
|
basis
|
cash
equivalents
|
investments
|
||||||||||||
Cash
|
$
|
7,382,810
|
$
|
-
|
$
|
7,382,810
|
$
|
7,382,810
|
$
|
-
|
||||||
Municipal
securities
|
5,000,000
|
-
|
5,000,000
|
-
|
5,000,000
|
|||||||||||
Commercial
paper
|
1,950,000
|
-
|
1,950,000
|
1,950,000
|
-
|
|||||||||||
Certificates
of deposit
|
1,924,000
|
-
|
1,924,000
|
-
|
1,924,000
|
|||||||||||
Industrial
revenue bonds
|
940,000
|
-
|
940,000
|
-
|
940,000
|
|||||||||||
$
|
17,196,810
|
$
|
-
|
$
|
17,196,810
|
$
|
9,332,810
|
$
|
7,864,000
|
2007
|
2006
|
||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||
Amount
|
Value
|
Amount
|
Value
|
||||||||||
Cash
and cash equivalents
|
$
|
11,694,699
|
$
|
11,694,699
|
$
|
9,332,810
|
$
|
9,332,810
|
|||||
Short-term
investments
|
398,592
|
398,592
|
7,864,000
|
7,864,000
|
2007
|
|
2006
|
|
2005
|
|||||||||||||||
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||
Avg.
|
Avg.
|
Avg.
|
|||||||||||||||||
Exercise
|
Exercise
|
Exercise
|
|||||||||||||||||
Options
|
Price
|
Options
|
Price
|
Options
|
Price
|
||||||||||||||
Outstanding
beginning of
|
|||||||||||||||||||
the
year
|
542,321
|
$
|
7.70
|
835,395
|
$
|
5.46
|
1,007,435
|
$
|
0.74
|
||||||||||
Granted
|
216,000
|
9.74
|
-
|
543,000
|
7.97
|
||||||||||||||
Exercised
|
(27,321
|
)
|
2.60
|
(247,457
|
)
|
0.74
|
(710,286
|
)
|
0.72
|
||||||||||
Forfeited
|
(5,500
|
)
|
9.74
|
(45,617
|
)
|
4.39
|
(4,754
|
)
|
0.71
|
||||||||||
Outstanding
at end of
|
|||||||||||||||||||
year
|
725,500
|
$
|
8.48
|
542,321
|
$
|
7.70
|
835,395
|
$
|
5.46
|
||||||||||
Exercisable
at end of year
|
515,000
|
$
|
7.96
|
542,321
|
$
|
7.70
|
706,675
|
$
|
6.31
|
As
of December 31, 2007
|
|||||||||||||||||||
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||
Range
of
|
Number
|
|
Weighted
Avg.
|
|
Weighted
Avg.
|
|
Number
|
|
Weighted
Avg.
|
|
Weighted
Avg.
|
||||||||
Exercise
Prices
|
Outstanding
|
|
Remaining
Life
|
|
Exercise
Price
|
|
Exercisable
|
|
Remaining
Life
|
|
Exercise
Price
|
||||||||
$7.92
|
485,000
|
7.00
|
|
$7.92
|
485,000
|
7.00
|
|
$7.92
|
|||||||||||
$8.68
|
30,000
|
7.79
|
8.68
|
30,000
|
7.79
|
8.68
|
|||||||||||||
$9.74
|
210,500
|
4.58
|
9.74
|
-
|
-
|
-
|
|||||||||||||
$7.92
- $9.74
|
725,500
|
6.33
|
|
$8.48
|
515,000
|
7.05
|
|
$7.96
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Stock
Options Exercised:
|
||||||||||
Intrinsic
value
|
$
|
223,000
|
$
|
2,262,000
|
$
|
5,557,000
|
||||
Actual
tax benefit realized
|
-
|
108,000
|
1,342,000
|
|||||||
Cash
received
|
71,000
|
121,000
|
143,000
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Expected
warrant life (years)
|
2.5
|
2.5
|
2.5
|
|||||||
Risk-free
weighted average interest rate
|
3.07
|
%
|
4.74
|
%
|
4.37
|
%
|
||||
Stock
price volatility
|
0.431
|
0.476
|
0.448
|
|||||||
Dividend
yield
|
1.2
|
%
|
1.0
|
%
|
0.6
|
%
|
2007
|
2006
|
2005
|
|||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||
Avg.
|
Avg.
|
Avg.
|
|||||||||||||||||
Exercise
|
Exercise
|
Exercise
|
|||||||||||||||||
Warrants
|
Price
|
Warrants
|
Price
|
Warrants
|
Price
|
||||||||||||||
Outstanding
beginning of
|
|||||||||||||||||||
the
year
|
76,142
|
$
|
10.25
|
66,719
|
$
|
9.47
|
76,852
|
$
|
5.70
|
||||||||||
Granted
|
25,891
|
8.19
|
28,995
|
8.68
|
25,303
|
13.18
|
|||||||||||||
Exercised
|
(1,401
|
)
|
8.85
|
(17,528
|
)
|
5.28
|
(35,347
|
)
|
3.94
|
||||||||||
Expired
and forfeited
|
(20,908
|
)
|
8.94
|
(2,044
|
)
|
5.12
|
(89
|
)
|
3.73
|
||||||||||
Outstanding
at end of
|
|||||||||||||||||||
year
|
79,724
|
$
|
9.95
|
76,142
|
$
|
10.25
|
66,719
|
$
|
9.47
|
||||||||||
Exercisable
at end of year
|
79,724
|
76,142
|
66,719
|
As
of December 31, 2007
|
||||||||||||||||
Warrants
Outstanding
|
Warrants
Exercisable
|
|||||||||||||||
Range
of
|
Number
|
Weighted
Avg.
|
Weighted
Avg.
|
Number
|
Weighted
Avg.
|
|||||||||||
Exercise
Prices
|
Outstanding
|
Remaining
Life
|
Exercise
Price
|
Exercisable
|
Exercise
Price
|
|||||||||||
$8.19
|
25,891
|
3.00
|
|
$8.19
|
25,891
|
|
$8.19
|
|||||||||
$8.68
|
28,530
|
2.00
|
8.68
|
28,530
|
8.68
|
|||||||||||
$13.18
|
25,303
|
1.00
|
13.18
|
25,303
|
13.18
|
|||||||||||
$8.19
- $13.18
|
79,724
|
2.01
|
|
$9.95
|
79,724
|
|
$9.95
|
Year
ended December 31
|
||||||||||
|
2007
|
2006
|
2005
|
|||||||
Stock
Warrants Exercised:
|
||||||||||
Intrinsic
value
|
$
|
2,000
|
$
|
78,000
|
$
|
212,000
|
||||
Actual
tax benefit realized
|
1,000
|
14,000
|
28,000
|
|||||||
Cash
received
|
12,000
|
93,000
|
131,000
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Numerator:
|
||||||||||
Net
income
|
$
|
5,041,115
|
$
|
7,898,103
|
$
|
7,521,416
|
||||
Denominator:
|
||||||||||
Denominator
for basic earnings per share -
|
||||||||||
weighted
average shares
|
16,094,000
|
16,465,000
|
15,885,000
|
|||||||
Dilutive
effect of employee stock options and
|
||||||||||
other
warrants
|
209,000
|
262,000
|
503,000
|
|||||||
Denominator
for diluted earnings per share -
|
||||||||||
adjusted
weighted average shares
|
16,303,000
|
16,727,000
|
16,388,000
|
|||||||
Basic
earnings per share
|
$
|
0.31
|
$
|
0.48
|
$
|
0.47
|
||||
Diluted
earnings per share
|
$
|
0.31
|
$
|
0.47
|
$
|
0.46
|
2008
|
$
|
92,814
|
||
2009
|
88,542
|
|||
2010
|
77,216
|
|||
2011
|
69,126
|
|||
2012
|
40,324
|
|||
$
|
368,022
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
United
States
|
$
|
11,448,135
|
$
|
15,803,248
|
$
|
15,186,474
|
||||
Foreign
|
(3,206,020
|
)
|
(2,800,145
|
)
|
(2,687,058
|
)
|
||||
$
|
8,242,115
|
$
|
13,003,103
|
$
|
12,499,416
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
2,598,000
|
$
|
4,340,000
|
$
|
4,594,000
|
||||
State
|
569,000
|
924,000
|
705,000
|
|||||||
Foreign
|
74,000
|
30,000
|
45,000
|
|||||||
Total
current
|
3,241,000
|
5,294,000
|
5,344,000
|
|||||||
Deferred:
|
||||||||||
Federal
|
(34,000
|
)
|
(168,000
|
)
|
(327,000
|
)
|
||||
State
|
(6,000
|
)
|
(21,000
|
)
|
(39,000
|
)
|
||||
Foreign
|
-
|
-
|
-
|
|||||||
Total
deferred
|
(40,000
|
)
|
(189,000
|
)
|
(366,000
|
)
|
||||
$
|
3,201,000
|
$
|
5,105,000
|
$
|
4,978,000
|
Year
ended December 31
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Income
taxes at U.S. statutory rate
|
$
|
2,802,000
|
$
|
4,524,000
|
$
|
4,250,000
|
||||
Impact
of graduated federal taxes
|
-
|
(103,000
|
)
|
-
|
||||||
State
income taxes, net of federal benefit
|
434,000
|
727,000
|
666,000
|
|||||||
Effect
of foreign losses without an income
|
||||||||||
tax
benefit
|
(23,000
|
)
|
-
|
50,000
|
||||||
Foreign
corporate income taxes
|
74,000
|
30,000
|
45,000
|
|||||||
Executive
life insurance expense
|
(3,000
|
)
|
16,000
|
33,000
|
||||||
Meals
and entertainment
|
58,000
|
68,000
|
41,000
|
|||||||
Extraterritorial
income exclusion
|
-
|
(27,000
|
)
|
(33,000
|
)
|
|||||
Qualified
production activities
|
||||||||||
income
- American Jobs Creation Act
|
(117,000
|
)
|
(99,000
|
)
|
(73,000
|
)
|
||||
Other
|
(24,000
|
)
|
(31,000
|
)
|
(1,000
|
)
|
||||
$
|
3,201,000
|
$
|
5,105,000
|
$
|
4,978,000
|
2007
|
2006
|
||||||
Deferred
tax assets:
|
|||||||
Product
refund reserve
|
$
|
243,000
|
$
|
162,000
|
|||
Inventory
obsolescence reserve
|
13,000
|
13,000
|
|||||
Vacation
accrual
|
27,000
|
23,000
|
|||||
Stock-based
compensation
|
94,000
|
64,000
|
|||||
Organization
costs
|
134,000
|
96,000
|
|||||
Deferred
compensation
|
361,000
|
393,000
|
|||||
Sales
incentives
|
-
|
129,000
|
|||||
Miscellaneous
accrued expenses
|
27,430
|
58,430
|
|||||
Foreign
net operating loss carryforwards
|
3,328,000
|
2,393,000
|
|||||
Valuation
allowance
|
(3,279,000
|
)
|
(2,344,000
|
)
|
|||
948,430
|
987,430
|
||||||
Deferred
tax liabilities:
|
|||||||
Depreciation
|
356,000
|
435,000
|
|||||
Net
deferred tax assets (liabilities)
|
$
|
592,430
|
$
|
552,430
|
|||
Reported
as:
|
|||||||
Current
deferred tax assets
|
$
|
574,430
|
$
|
594,430
|
|||
Non-current
deferred tax assets 1
|
18,000
|
-
|
|||||
Non-current
deferred tax liabilities
|
-
|
42,000
|
|||||
Net
deferred tax assets (liabilities)
|
$
|
592,430
|
$
|
552,430
|
Beginning
Balance as of January 1, 2007 (date of adoption)
|
$
|
87,700
|
||
Settlements
and effective settlements with tax authorities
|
(1,900
|
)
|
||
Lapse
of statute of limitations
|
-
|
|||
Increases
in balances related to tax positions taken during prior
periods
|
112,700
|
|||
Decreases
in balances related to tax positions taken during prior
periods
|
(22,300
|
)
|
||
Increases
in balances related to tax positions taken during current
period
|
44,300
|
|||
Balance
as of December 31, 2007
|
$
|
220,500
|
2007
|
2006
|
2005
|
||||||||
Net
sales to external customers
|
||||||||||
United
States
|
$
|
98,347,762
|
$
|
105,783,642
|
$
|
102,549,244
|
||||
Australia/New
Zealand
|
2,943,848
|
2,550,086
|
2,215,465
|
|||||||
Canada
|
1,633,928
|
1,637,999
|
1,667,555
|
|||||||
Mexico
|
1,526,146
|
1,433,462
|
1,607,473
|
|||||||
United
Kingdom
|
1,062,088
|
1,234,976
|
846,273
|
|||||||
Malaysia/Singapore
|
1,765,124
|
1,804,704
|
2,031,045
|
|||||||
Philippines
|
2,942,156
|
2,197,813
|
2,328,178
|
|||||||
Germany
|
836,452
|
824,475
|
319,931
|
|||||||
Total
net sales
|
$
|
111,057,504
|
$
|
117,467,157
|
$
|
113,565,164
|
||||
Assets
by area
|
||||||||||
United
States
|
$
|
29,388,767
|
$
|
32,438,453
|
$
|
20,920,384
|
||||
Australia/New
Zealand
|
604,852
|
500,916
|
670,787
|
|||||||
Canada
|
232,631
|
134,859
|
176,760
|
|||||||
Mexico
|
953,937
|
1,250,811
|
1,323,482
|
|||||||
United
Kingdom
|
320,767
|
283,884
|
195,399
|
|||||||
Malaysia/Singapore
|
1,006,780
|
1,209,616
|
1,414,909
|
|||||||
Philippines
|
599,733
|
977,034
|
764,471
|
|||||||
Germany
|
499,304
|
486,647
|
515,231
|
|||||||
Total
consolidated assets
|
$
|
33,606,771
|
$
|
37,282,220
|
$
|
25,981,423
|
2007
|
2006
|
2005
|
||||||||
Net
sales by product category
|
||||||||||
Nutritional
and dietary supplements
|
$
|
96,935,192
|
$
|
102,295,598
|
$
|
99,254,075
|
||||
Skin
care products
|
1,091,896
|
1,119,836
|
1,131,012
|
|||||||
Sales
aids and other
|
1,438,158
|
2,081,986
|
1,660,296
|
|||||||
Handling
& freight income
|
11,592,258
|
11,969,737
|
11,519,781
|
|||||||
Total
net sales
|
$
|
111,057,504
|
$
|
117,467,157
|
$
|
113,565,164
|
First
|
Second
|
Third
|
Fourth
|
||||||||||
(In
thousands, except per share amounts)
|
|||||||||||||
2007
|
|||||||||||||
Net
sales
|
$
|
34,964
|
$
|
26,325
|
$
|
25,121
|
$
|
24,648
|
|||||
Gross
profit
|
$
|
28,902
|
$
|
21,926
|
$
|
20,800
|
$
|
20,329
|
|||||
Net
income
|
$
|
2,620
|
$
|
823
|
$
|
901
|
$
|
697
|
|||||
Net
income available to
|
|||||||||||||
common
shareholders
|
$
|
2,620
|
$
|
823
|
$
|
901
|
$
|
697
|
|||||
Earnings
per share:
|
|||||||||||||
Basic
|
$
|
0.16
|
$
|
0.05
|
$
|
0.06
|
$
|
0.04
|
|||||
Diluted
|
$
|
0.16
|
$
|
0.05
|
$
|
0.06
|
$
|
0.04
|
|||||
2006
|
|||||||||||||
Net
sales
|
$
|
31,195
|
$
|
27,849
|
$
|
29,779
|
$
|
28,644
|
|||||
Gross
profit
|
$
|
26,113
|
$
|
23,126
|
$
|
24,828
|
$
|
23,880
|
|||||
Net
income
|
$
|
2,450
|
$
|
1,620
|
$
|
1,804
|
$
|
2,024
|
|||||
Net
income available to
|
|||||||||||||
common
shareholders
|
$
|
2,450
|
$
|
1,620
|
$
|
1,804
|
$
|
2,024
|
|||||
Earnings
per share:
|
|||||||||||||
Basic
|
$
|
0.16
|
$
|
0.10
|
$
|
0.11
|
$
|
0.12
|
|||||
Diluted
|
$
|
0.15
|
$
|
0.09
|
$
|
0.11
|
$
|
0.12
|
Column
A
|
Column
B
|
Column
C
|
Column
E
|
Column
F
|
|||||||||
Balance
at
|
|||||||||||||
Beginning
of
|
Charged
to Costs
|
Deductions
|
Balance
at End
|
||||||||||
Classification
|
Year
|
and
Expenses
|
Describe
|
of
Year
|
|||||||||
Year
ended December 31, 2007
|
|||||||||||||
Deducted
from asset accounts:
|
|||||||||||||
Allowance
for doubtful accounts
|
$
|
6,200
|
$
|
19,200
|
$
|
17,100
|
(1)
|
$
|
8,300
|
||||
Reserve
for obsolete inventory
|
32,800
|
46,300
|
45,800
|
(2) |
33,300
|
||||||||
Liability
accounts:
|
|||||||||||||
Reserve
for refunds
|
421,000
|
1,905,900
|
(3) |
1,696,900
|
(3) |
630,000
|
|||||||
Year
ended December 31, 2006
|
|||||||||||||
Deducted
from asset accounts:
|
|||||||||||||
Allowance
for doubtful accounts
|
$
|
39,700
|
$
|
19,700
|
$
|
53,200
|
(1)
|
$
|
6,200
|
||||
Reserve
for obsolete inventory
|
158,000
|
81,800
|
207,000
|
(2) |
32,800
|
||||||||
Liability
accounts:
|
|||||||||||||
Reserve
for refunds
|
382,000
|
1,368,700
|
(3) |
1,329,700
|
(3) |
421,000
|
|||||||
Year
ended December 31, 2005
|
|||||||||||||
Deducted
from asset accounts:
|
|||||||||||||
Allowance
for doubtful accounts
|
$
|
11,500
|
$
|
73,700
|
$
|
45,500
|
(1)
|
$
|
39,700
|
||||
Reserve
for obsolete inventory
|
12,000
|
150,400
|
4,400
|
(2) |
158,000
|
||||||||
Liability
accounts:
|
|||||||||||||
Reserve
for refunds
|
257,000
|
1,363,500
|
(3) |
1,238,500
|
(3) |
382,000
|
(1)
|
Uncollectible
accounts written off, net of
recoveries.
|
(2)
|
Disposal
of obsolete inventory.
|
(3) |
Amounts
refunded, net of salable amounts returned are shown as a reduction
of net
sales
|