Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.8.0.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2017
Stockholders' Equity Note [Abstract]  
Stockholders' Equity STOCKHOLDERS’ EQUITY
 
Authorized Shares
 
The Company is authorized to issue two classes of capital stock consisting of up to 5,000,000 shares of preferred stock, $0.001 par value, and 50,000,000 shares of common stock, $0.001 par value.
 
Dividends
 
The following tables summarize the Company’s cash dividend activity during 2017, 2016 and 2015 (in thousands, except per share data):
Declaration Date
 
Per Common Share
 
Amount
 
Payment Date
October 30, 2017 (special)
 
$
0.15

 
$
1,701

 
November 24, 2017
October 30, 2017
 
0.12

 
1,360

 
November 24, 2017
July 31, 2017 (special)
 
0.25

 
2,833

 
August 31, 2017
July 31, 2017
 
0.11

 
1,246

 
August 31, 2017
April 24, 2017 (special)
 
0.35

 
3,964

 
May 19, 2017
April 24, 2017
 
0.10

 
1,133

 
May 19, 2017
January 24, 2017 (special)
 
0.35

 
3,962

 
March 3, 2017
January 24, 2017
 
0.09

 
1,019

 
March 3, 2017
 
 
$
1.52

 
$
17,218

 
 
Declaration Date
 
Per Common Share
 
Amount
 
Payment Date
October 23, 2016 (special)
 
$
0.35

 
$
3,941

 
November 25, 2016
October 23, 2016
 
0.08

 
901

 
November 25, 2016
July 19, 2016
 
0.07

 
787

 
August 26, 2016
April 21, 2016
 
0.06

 
686

 
May 20, 2016
March 1, 2016
 
0.05

 
576

 
March 24, 2016
Total
 
$
0.61

 
$
6,891

 
 
Declaration Date
 
Per Common Share
 
Amount
 
Payment Date
October 21, 2015
 
$
0.05

 
$
598

 
November 20, 2015
July 28, 2015
 
0.04

 
489

 
August 28, 2015
May 4, 2015
 
0.03

 
372

 
May 29, 2015
February 27, 2015
 
0.02

 
250

 
March 27, 2015
Total
 
$
0.14

 
$
1,709

 
 

Declaration and payment of any future dividends on shares of common stock will be at the discretion of the Company’s Board of Directors.

Stock Repurchases

On January 12, 2016, the Board of Directors authorized an increase to the Company’s stock repurchase program first approved on July 28, 2015 from $15.0 million to $70.0 million. Repurchases are expected to be executed to the extent that the Company’s earnings and cash-on-hand allow, and will be made in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act. For all or a portion of the authorized repurchase amount, the Company may enter into one or more plans that are compliant with Rule 10b5-1 of the Exchange Act that are designed to facilitate these purchases. The stock repurchase program does not require the Company to acquire a specific number of shares, and may be suspended from time to time or discontinued.

During February 2016, pursuant to the stock repurchase program, the Company authorized its broker to proceed with the purchase of shares of the Company’s common stock in the open market. During the year ended December 31, 2016, the Company purchased a total of 903,031 shares of its common stock for an aggregate purchase price of $23.7 million, plus transaction costs. No shares of the Company’s common stock were repurchased by the Company during the year ended December 31, 2017. As of December 31, 2017, $32.0 million of the $70.0 million stock repurchase program approved on July 28, 2015 and increased on January 12, 2016 remained available for future purchases, inclusive of related estimated income tax.

On July 28, 2015, the Board of Directors approved a stock repurchase program of up to $15.0 million of the Company’s outstanding shares of common stock. Repurchases are expected to be executed to the extent that the Company’s earnings and cash-on-hand allow, are anticipated to be conducted through December 2016, and will be made in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act.  For all or a portion of the authorized repurchase amount, the Company may enter into one or more plans that are compliant with Rule 10b5-1 of the Exchange Act that are designed to facilitate these purchases.  The repurchase program does not require the Company to acquire a specific number of shares, and may be suspended from time to time or discontinued. In connection therewith, the Company was advised that George K. Broady, a director of the Company and owner of more than 5% of its outstanding shares of common stock, would participate in the stock repurchase program on a basis roughly proportional to his family’s ownership interest.

During August 2015, pursuant to the foregoing stock repurchase program, the Company authorized its broker to proceed with the purchase of shares of the Company’s common stock in the open market for a total purchase price of $3.5 million. The open market repurchases were completed on August 4, 2015. The stock repurchase program, which included both open market purchases and the purchase of shares from Mr. Broady, resulted in the Company purchasing a total of 162,442 shares of its common stock for an aggregate purchase price of $5.0 million, plus transaction costs. During October 2015, the Company authorized its broker to proceed with the purchase of shares of the Company’s common stock in the open market for a total purchase price of $3.6 million. The open market repurchases were completed on October 30, 2015. The stock repurchase program, which included both open market purchases and the purchase of shares from Mr. Broady, resulted in the Company purchasing a total of 106,264 shares of its common stock for an aggregate purchase price of $5.0 million, plus transaction costs.

On May 4, 2015, the Board of Directors approved a separate, prior stock repurchase program of up to $5.0 million of the Company’s outstanding shares of common stock.  In connection therewith, the Company was advised by Mr. Broady that he would participate in the stock repurchase program on a basis roughly proportional to his family’s ownership interest (see Note 8). As such, the Company authorized its broker to proceed with the purchase of shares of the Company’s common stock in the open market for a total purchase price of $3.5 million in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act. The stock repurchase program, which included both open market purchases and the purchase of shares from Mr. Broady, was completed on May 13, 2015, and resulted in the Company purchasing a total of 186,519 shares of its common stock for an aggregate purchase price of $5.0 million, plus transaction costs. 

On January 22, 2015, the Company entered into a stock repurchase agreement with Mr. Broady that provided for the Company’s purchase from Mr. Broady in off-the-market, private transactions of a total of 91,817 shares of the Company’s common stock, which would be purchased at the rate of 5,000 shares each trading day following the date of the agreement until all of such shares were purchased (see Note 8). The shares were purchased at a per share price equal to the closing price per share of the Company’s common stock on the preceding trading day, as reported on the primary market in which the Company’s common stock is publicly traded. The Company’s purchases concluded on February 19, 2015, and resulted in an aggregate purchase price of $1.1 million.

Restricted Stock

Stock-based compensation expense totaled approximately $35,000, $104,000 and $86,000 for 2017, 2016 and 2015, respectively. During March 2016, the Company modified the vesting feature of an award granted to a director who decided to not stand for re-election at the Company’s 2016 annual meeting of stockholders. The modification of the award resulted in an additional $64,000 in stock-based compensation expense for the three months ended March 31, 2016.

At the Company’s annual meeting of stockholders held on April 7, 2016, the Company’s stockholders approved the Natural Health Trends Corp. 2016 Equity Incentive Plan (the “2016 Plan”) to replace its 2007 Equity Incentive Plan. The 2016 Plan allows for the grant of various equity awards including incentive stock options, non-statutory options, stock, stock units stock appreciation rights and other similar equity-based awards to the Company’s employees, officers, non-employee directors, contractors, consultants and advisors of the Company. Up to 2,500,000 shares of the Company’s common stock (subject to adjustment under certain circumstances) may be issued pursuant to awards granted. As of December 31, 2017, 2,393,873 shares remained available for issuance under the 2016 Plan.

On January 24, 2017, the Company granted 56,260 shares of restricted common stock under the 2016 Plan to certain employees for the purpose of further aligning their interest with those of its stockholders and settling fiscal 2016 performance incentives totaling $1.4 million. The shares vest on a quarterly basis over three years and are subject to forfeiture in the event of the employee’s termination of service to the Company under specified circumstances.

On April 8, 2016, the Company granted 51,015 shares of restricted common stock under the 2016 Plan to certain employees for the purpose of further aligning their interest with those of its stockholders and settling fiscal 2015 performance incentives totaling $1.7 million. The shares vest on a quarterly basis over three years and are subject to forfeiture in the event of the employee’s termination of service to the Company under specified circumstances.

The following table summarizes the Company’s restricted stock activity under the 2016 Plan:
 
Shares
 
Wtd. Avg. Price at Date of Issuance
Nonvested at December 31, 2015
—

 
$
—

Granted
51,015

 
34.13

Vested
(12,759
)
 
34.13

Nonvested at December 31, 2016
38,256

 
34.13

Granted
56,260

 
25.44

Vested
(35,336
)
 
29.58

Forfeited
(1,148
)
 
28.55

Nonvested at December 31, 2017
58,032

 
28.72


On January 20, 2015, the Company’s Board of Directors granted 60,960 shares of restricted common stock to certain employees and its then-existing outside directors for the purpose of further aligning their interest with those of its stockholders and as to the employee shares, settling fiscal 2014 performance incentives. The shares vested on a quarterly basis over the next three years and were subject to forfeiture in the event of their termination of service to the Company under specified circumstances. On February 11, 2015, the Board of Directors granted an additional 6,116 shares of restricted common stock to its newly-elected outside directors subject to the same conditions.

The following table summarizes the Company’s other restricted stock activity:
 
Shares
 
Wtd. Avg. Price at Date of Issuance
Nonvested at December 31, 2014
—

 
$
—

Granted
67,076

 
12.15

Vested
(22,364
)
 
12.15

Nonvested at December 31, 2015
44,712

 
12.15

Vested
(22,364
)
 
12.15

Nonvested at December 31, 2016
22,348

 
12.15

Vested
(21,930
)
 
12.15

Forfeited
(418
)
 
12.28

Nonvested at December 31, 2017
—

 
12.15


On August 13, 2012, the Board of Directors authorized the Company, acting as trustee for certain of its non-officer, overseas employees, to execute a Rule 10b5-1 plan to purchase 100,000 shares of its common stock in accordance with guidelines specified under Rule 10b5-1 of the Exchange Act and the Company’s policies regarding stock transactions.  Pursuant to this authority, the Company, as Trustee, entered into a 10b5-1 plan and began purchasing in December 2012. The latest 10b5-1 plan terminated in November 2014, and the Company, as Trustee, did not enter into a new 10b5-1 plan. The employees received the stock as incentive compensation in quarterly increments over three years beginning March 15, 2013, provided that they were employees of the Company on the date of the distribution. Any common stock that was forfeited by an employee whose employment terminated was delivered to the Company and held as treasury stock.
 
Shares
 
Wtd. Avg. Grant-Date Fair Value
Nonvested at December 31, 2014
23,984

 
1.37

Vested
(23,984
)
 
1.37

Nonvested at December 31, 2015
—

 
—