MANNATECH INC Leases Disclosure
NOTE 6: LEASES
The Company has entered into contractual lease arrangements to rent office space and equipment from third-party lessors and accounts for leases in accordance with ASC Topic 842. Right of use assets represent the Company’s right to use an underlying asset over 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 with terms greater than 12 months are recorded at the present value of the lease payments at the commencement date. The related right of use 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, future lease payments are discounted using the incremental borrowing rate available to the Company. 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. Lease components, such as office space, are accounted for separately from the non-lease components, such as maintenance fees. 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. 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.
Generally, the Company’s operating leases relate to office space used in Mannatech’s operations, including its headquarters in Flower Mound, Texas and office space in international locations in which the Company does business. As of December 31, 2025 and 2024, all of the Company’s finance leases pertain to certain equipment used in the business.
On March 10, 2023, the Company entered into a -year agreement to sublease a portion of the Company's leased office space in Flower Mound, Texas to a subtenant. There was no modification or impairment by entering into the sublease agreement because the Company was not released from its obligations under the head lease. The Company earned $0.1 million sublease revenue for each of the years ended December 31, 2025 and 2024, which is presented as a component of net sales on the Company's Consolidated Statements of Operations. The Company has made a policy election in accordance with ASC 842-10-15-39A to exclude from consideration taxes that are assessed on and collected from the sublessee.
As of December 31, 2025 and 2024, our right-of-use assets and lease liabilities balances, net of accumulated amortization, were as follows (in thousands):
| Leases | Classification | December 31, 2025 | December 31, 2024 | ||||||
| Right-of-use assets | |||||||||
| Operating leases | Operating lease right-of-use assets | $ | 3,292 | $ | 2,094 | ||||
| Finance leases | Property and , net | 684 | 961 | ||||||
| Total right-of-use assets | $ | 3,976 | $ | 3,055 | |||||
| Current portion of lease liabilities | |||||||||
| Operating leases | Current portion of operating leases | $ | 1,671 | $ | 1,178 | ||||
| Finance leases | Current portion of finance leases | 293 | 275 | ||||||
| Long-term portion of lease liabilities | |||||||||
| Operating leases | Operating lease liabilities, excluding current portion | 2,253 | 1,576 | ||||||
| Finance leases | Finance leases, excluding current portion | 388 | 680 | ||||||
| Total lease liabilities | $ | 4,605 | $ | 3,709 | |||||
Operating lease costs are recognized on a straight-line basis over the lease term. Finance lease costs are composed of the amortization of the right of use asset and the amounts recorded as interest. For the years ended December 31, 2025 and 2024, we incurred the following lease costs related to our operating and finance leases (in thousands):
| Lease Cost | Classification | 2025 | 2024 | ||||||
| Operating leases | |||||||||
| Operating lease costs | Selling and administrative expenses | $ | 1,892 | $ | 1,714 | ||||
| Short term lease costs | Selling and administrative expenses | 216 | 183 | ||||||
| Finance leases | |||||||||
| Amortization of leased assets | Depreciation and amortization | 271 | 271 | ||||||
| Interest on lease liabilities | Interest (expense) income | 52 | 69 | ||||||
| Total lease cost | $ | 2,431 | $ | 2,237 | |||||
For the years ended December 31, 2025 and 2024, cash paid for amounts included in the measurement of lease liabilities included (in thousands):
| 2025 | 2024 | |||||||
| Operating cash flows from operating leases | $ | 1,781 | $ | 1,358 | ||||
| Financing cash flows from finance leases | $ | 327 | $ | 337 | ||||
As of December 31, 2025 and 2024 the Company's lease terms and discount rates were:
| 2025 | 2024 | |||||||
| Operating leases | ||||||||
| Weighted-average remaining lease term (years) | 2.35 | 2.77 | ||||||
| Weighted-average discount rate | 4.46 | % | 5.34 | % | ||||
| Finance leases | ||||||||
| Weighted-average remaining lease term (years) | 2.22 | 3.21 | ||||||
| Weighted-average discount rate | 6.45 | % | 6.45 | % | ||||
As of December 31, 2025 future minimum lease payments were as follows (in thousands):
| December 31, 2025 | ||||||||||||
| Maturity of lease liabilities | Operating Leases | Finance Leases | Sublease Income | |||||||||
| 2026 | 1,830 | 327 | (132 | ) | ||||||||
| 2027 | 1,552 | 315 | (132 | ) | ||||||||
| 2028 | 794 | 90 | (55 | ) | ||||||||
| Thereafter | — | — | — | |||||||||
| Total future minimum lease payments | $ | 4,176 | $ | 732 | $ | (319 | ) | |||||
| Imputed interest | (252 | ) | (51 | ) | — | |||||||
| Present value of minimum lease payments | $ | 3,924 | $ | 681 | $ | (319 | ) | |||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 15, 2026 | Showing above |
| 2022 | Mar 17, 2023 | |
| 2021 | Mar 15, 2022 | |
| 2020 | Mar 19, 2021 | |
| 2019 | Mar 26, 2020 | |
| 2018 | Mar 11, 2019 | |
| 2017 | Mar 26, 2018 | |
| 2016 | Mar 14, 2017 | |
| 2015 | Mar 15, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.