CAPITAL LEASE OBLIGATIONS

12 Months Ended

Dec. 31, 2020

Leases, Capital [Abstract]

Leases of Lessee Disclosure [Text Block]

LEASES

The Company leases office space and equipment from third-party lessors. On January 1, 2019, the Company adopted ASC Topic 842, Leases, ("Topic 842") and related disclosures. See note 5 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019. 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. 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. 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. 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.

Operating lease liabilities and finance lease liabilities are recorded at the present value of lease payments over the lease term at the commencement date. 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. The Company uses the discount rate implicit in the lease when it is readily determinable. 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.

Operating lease costs are recognized on a straight-line basis over the lease term. Finance lease costs are composed of the amortization of the ROU asset and the amounts recorded as interest. Leases with an initial term of 12 months or less are considered short term and are not recorded on the balance sheet. The Company recognizes a lease expense for short term leases on a straight-line basis over the lease term.

Certain of the Company's leases may also include rent escalation clauses or options to extend or terminate the lease. These options are included in the present value recorded for the leases when it is reasonably certain that the Company will exercise that option. None of the Company’s current leases contain guarantees of residual value.

The Company determines whether an arrangement is a lease at the inception of the contract. 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". 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”. 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):

Leases	Classification	December 31, 2020		December 31, 2019
Assets
ROU Assets from operating leases	Other assets	$	6,943	$	5,568
ROU Assets from financing leases	Property and equipment, net	$	288	$	269
Total leased assets		$	7,231	$	5,837
Liabilities
Current
Operating	Accrued expenses	$	2,067	$	1,622
Financing	Current portion of finance leases	$	76	$	87
Long-Term
Operating	Other long-term liabilities	$	6,124	$	5,307
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):

Lease Cost	Classification	Twelve Months Ended December 31, 2020	Twelve Months Ended December 31, 2019
Operating leases
Operating lease costs	Other operating cost	2,422	2,074
Short term lease costs	Other operating cost	228	245
Finance leases
Amortization of leased assets	Depreciation and amortization	115	111
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):

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
Operating cash flows from operating leases	$	2,400	$	2,154
Financing cash flows from finance leases	$	103	$	222

    Lease term and discount rates related to the Company's leases are as follows:

	December 31, 2020		December 31, 2019
Operating leases
Weighted-average remaining lease term (years)	5.15		6.11
Weighted-average discount rate	4.11	%	4.04	%
Financing leases
Weighted-average remaining lease term (years)	2.85		3.20
Weighted-average discount rate	6.55	%	4.95	%

    As of December 31, 2020 and 2019 future minimum lease payments were as follows (in thousands):

	December 31, 2020
Maturity of lease liabilities	Operating Leases	Financing Leases
2021	2,644	98
2022	1,930	75
2023	1,217	45
2024	1,308	21
2025	892	1
Thereafter	1,528	—
Total future minimum lease payments	9,519	240
Imputed interest	(1,328)	(35)
Present value of minimum lease payments	8,191	205