##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 000-50417
 RBC Life Sciences, Inc.
  Nevada
    
    91-2015186(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification No.)2301 Crown Court, Irving, Texas
    
    75038(Address of principal executive offices)
    
    (Zip code)
 (Registrants telephone number, including area code)
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o (Do not check if smaller reporting company)
    
    Smaller reporting company þ
 Exchange Act) (Check one).
 o þ




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##### 



Page NumberPART I  FINANCIAL INFORMATION Page NumberItem 1. Condensed Consolidated Financial Statements (unaudited)
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    21PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22Signatures
    
    
    23Exhibit Index
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 RBC LIFE SCIENCES, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    7,130,391
    
    
    $
    6,368,885Accounts receivable, net
    
    
    568,042
    
    
    
    687,505Inventories
    
    
    4,885,248
    
    
    
    4,725,372Deferred income taxes
    
    
    368,395
    
    
    
    340,395Prepaid expenses
    
    
    682,959
    
    
    
    305,960Total current assets
    
    
    13,635,035
    
    
    
    12,428,117Property and equipment, net
    
    
    4,186,070
    
    
    
    4,078,035Goodwill, net
    
    
    2,265,399
    
    
    
    2,302,226Intangible assets, net
    
    
    119,950
    
    
    
    151,758Other assets
    
    
    205,403
    
    
    
    198,306$
    20,411,857
    
    
    $
    19,158,442LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable, trade
    
    $
    1,746,216
    
    
    $
    1,932,158Accrued liabilities
    
    
    1,650,562
    
    
    
    2,498,682Current maturities of long-term obligations
    
    
    141,635
    
    
    
    135,428Deferred revenue
    
    
    5,076,963
    
    
    
    4,323,316Total current liabilities
    
    
    8,615,376
    
    
    
    8,889,584Long-term obligations, less current maturities
    
    
    2,089,223
    
    
    
    2,196,468Deferred income taxes
    
    
    439,154
    
    
    
    494,265Shareholders equity:Common stock, $0.001 par value; 50,000,000
shares authorized; 21,915,004 and 20,863,724 shares
issued and outstanding at September 30, 2008 and
December 31, 2007, respectively
    
    
    21,915
    
    
    
    20,864Additional paid-in capital
    
    
    13,333,494
    
    
    
    13,086,182Accumulated deficit
    
    
    (4,242,947
    )
    
    
    (5,720,001
    )Accumulated other comprehensive income
    
    
    155,642
    
    
    
    191,0809,268,104
    
    
    
    7,578,125$
    20,411,857
    
    
    $
    19,158,442
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##### Table of Contents



RBC LIFE SCIENCES, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
 For the Quarters Ended September 30,2008
    
    
    2007Net sales
    
    $
    9,925,196
    
    
    $
    7,857,424Cost of sales
    
    
    5,215,627
    
    
    
    3,701,943Gross profit
    
    
    4,709,569
    
    
    
    4,155,481Operating expenses:General and administrative
    
    
    2,634,437
    
    
    
    2,296,243Distributor commissions
    
    
    601,302
    
    
    
    600,753Depreciation and amortization
    
    
    86,665
    
    
    
    80,499Total operating expenses
    
    
    3,322,404
    
    
    
    2,977,495Operating profit
    
    
    1,387,165
    
    
    
    1,177,986Interest expense
    
    
    43,442
    
    
    
    51,429Earnings before income taxes
    
    
    1,343,723
    
    
    
    1,126,557Provision for income taxes
    
    
    498,000
    
    
    
    455,000Net earnings
    
    $
    845,723
    
    
    $
    671,557Earnings per share:Basic
    
    $
    0.04
    
    
    $
    0.03Diluted
    
    
    0.04
    
    
    
    0.03Weighted average common shares outstanding:Basic
    
    
    21,587,224
    
    
    
    20,424,861Diluted
    
    
    22,906,187
    
    
    
    22,802,804
   - 4 -




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RBC LIFE SCIENCES, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
 For the Nine Months Ended September 30,2008
    
    
    2007Net sales
    
    $
    23,159,662
    
    
    $
    20,396,989Cost of sales
    
    
    11,250,738
    
    
    
    9,143,861Gross profit
    
    
    11,908,924
    
    
    
    11,253,128Operating expenses:General and administrative
    
    
    7,438,620
    
    
    
    6,463,102Distributor commissions
    
    
    1,719,049
    
    
    
    1,898,906Depreciation and amortization
    
    
    251,925
    
    
    
    254,672Total operating expenses
    
    
    9,409,594
    
    
    
    8,616,680Operating profit
    
    
    2,499,330
    
    
    
    2,636,448Interest expense
    
    
    132,276
    
    
    
    164,591Earnings before income taxes
    
    
    2,367,054
    
    
    
    2,471,857Provision for income taxes
    
    
    890,000
    
    
    
    965,000Net earnings
    
    $
    1,477,054
    
    
    $
    1,506,857Earnings per share:Basic
    
    $
    0.07
    
    
    $
    0.07Diluted
    
    
    0.06
    
    
    
    0.07Weighted average common shares outstanding:Basic
    
    
    21,314,775
    
    
    
    20,293,038Diluted
    
    
    22,923,458
    
    
    
    22,440,420
   - 5 -




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RBC LIFE SCIENCES, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Nine Months Ended September 30,2008
    
    
    2007Cash flows from operating activities:Net earnings
    
    $
    1,477,054
    
    
    $
    1,506,857Adjustment for non-cash items:Depreciation and amortization
    
    
    277,587
    
    
    
    275,185Stock-based compensation
    
    
    90,764
    
    
    
    53,945Deferred income taxes
    
    
    (87,000
    )
    
    
    (120,000
    )Loss on disposition of assets
    
    
    
    
    
    
    19,402Change in operating assets and liabilities:Accounts receivable
    
    
    119,506
    
    
    
    (144,991
    )Inventories
    
    
    (169,313
    )
    
    
    (1,491,822
    )Prepaid expenses
    
    
    (377,464
    )
    
    
    155,086Other assets
    
    
    (7,765
    )
    
    
    108,908Accounts payable and accrued liabilities
    
    
    (1,024,697
    )
    
    
    2,242,093Deferred revenue
    
    
    753,647
    
    
    
    175,651Net cash provided by operating activities
    
    
    1,052,319
    
    
    
    2,780,314Cash flows from investing activities:Purchase of property and equipment
    
    
    (356,406
    )
    
    
    (154,528
    )Net cash used by investing activities
    
    
    (356,406
    )
    
    
    (154,528
    )Cash flows from financing activities:Net payments of lines of credit
    
    
    
    
    
    
    (100,000
    )Payments of long-term obligations
    
    
    (101,038
    )
    
    
    (533,150
    )Proceeds from the exercise of stock options
    
    
    157,600
    
    
    
    34,614Net cash provided (used) by financing activities
    
    
    56,562
    
    
    
    (598,536
    )Effect of exchange rate changes on cash flows
    
    
    9,031
    
    
    
    15,314Net increase in cash and cash equivalents
    
    
    761,506
    
    
    
    2,042,564Cash and cash equivalents, beginning of period
    
    
    6,368,885
    
    
    
    3,219,503Cash and cash equivalents, end of period
    
    $
    7,130,391
    
    
    $
    5,262,067
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RBC LIFE SCIENCES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note A  Unaudited Condensed Consolidated Financial Statements:
   Note B  Nature of Operations and Organization:
     - 7 -




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Note C  Inventories:
  September 30, 2008
    
    
    December 31, 2007Raw materials and bulk products
    
    $
    513,467
    
    
    $
    573,625Packaging materials
    
    
    521,835
    
    
    
    509,541Finished goods
    
    
    3,849,946
    
    
    
    3,642,206$
    4,885,248
    
    
    $
    4,725,372
 Note D  Prepaid Expenses:
  September 30, 2008
    
    
    December 31, 2007Advance payment to suppliers
    
    $
    413,627
    
    
    $
    179,844Prepaid insurance and other
    
    
    269,332
    
    
    
    126,116$
    682,959
    
    
    $
    305,960
 Note E  Property and Equipment:
  September 30, 2008
    
    
    December 31, 2007Building and improvements
    
    $
    3,507,407
    
    
    $
    3,314,482Computer software and office equipment
    
    
    1,571,118
    
    
    
    1,567,381Warehouse equipment
    
    
    369,151
    
    
    
    345,030Automotive equipment
    
    
    55,392
    
    
    
    55,392Leasehold improvements
    
    
    20,627
    
    
    
    22,1205,523,695
    
    
    
    5,304,405Less  accumulated depreciation
    
    
    (2,478,798
    )
    
    
    (2,367,543
    )3,044,897
    
    
    
    2,936,862Land
    
    
    1,141,173
    
    
    
    1,141,173$
    4,186,070
    
    
    $
    4,078,035
 Note F  Goodwill and Other Intangible Assets:
  September 30, 2008
    
    
    December 31, 2007Gross
    
    
    
    
    
    
    Grosscarrying
    
    
    Accumulated
    
    
    carrying
    
    
    Accumulatedvalue
    
    
    amortization
    
    
    value
    
    
    amortizationGoodwill
    
    $
    3,371,651
    
    
    $
    (1,106,252
    )
    
    $
    3,443,512
    
    
    $
    (1,141,286
    )
  - 8 -




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##### Table of Contents



September 30, 2008
    
    
    December 31, 2007Average
    
    
    Gross
    
    
    
    
    
    
    GrossLife
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Accumulated(years)
    
    
    Value
    
    
    Amortization
    
    
    Value
    
    
    AmortizationDistribution contracts
    
    
    8
    
    
    $
    277,369
    
    
    $
    (236,297
    )
    
    $
    277,369
    
    
    $
    (211,583
    )Copyrights,
trademarks and other
registrations
    
    
    19
    
    
    
    99,100
    
    
    
    (37,658
    )
    
    
    99,100
    
    
    
    (33,694
    )Other
    
    
    11
    
    
    
    47,600
    
    
    
    (30,164
    )
    
    
    47,600
    
    
    
    (27,034
    )$
    424,069
    
    
    $
    (304,119
    )
    
    $
    424,069
    
    
    $
    (272,311
    )
  Remainder of 2008
    
    $
    10,6012009
    
    
    24,0492010
    
    
    21,6262011
    
    
    13,7922012
    
    
    5,957Thereafter
    
    
    43,925Total
    
    $
    119,950
 Note G  Accrued Liabilities:
  September 30, 2008
    
    
    December 31, 2007Salaries and wages
    
    $
    882,160
    
    
    $
    850,855Income taxes
    
    
    229,561
    
    
    
    1,052,813Distributor commissions
    
    
    318,695
    
    
    
    362,900Sales and property taxes
    
    
    65,703
    
    
    
    57,908Interest
    
    
    14,408
    
    
    
    15,064Other
    
    
    140,035
    
    
    
    159,142$
    1,650,562
    
    
    $
    2,498,682
 Note H  Share-Based Compensation:
 Share-Based Payment
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Quarters Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008 (1)
    
    
    2007 (1)
    
    
    2008
    
    
    2007 (1)Weighted average expected life (years)
    
    
    
    
    
    
    
    
    
    
    9.0
    
    
    
    Risk-free interest rate
    
    
    
    
    
    
    
    
    
    
    3.77
    %
    
    
    Expected volatility
    
    
    
    
    
    
    
    
    
    
    138.57
    %
    
    
    Expected dividend yield
    
    
    
    
    
    
    
    
    
    
    0.0
    %
    
    
    
 
 (1)
    
    There were no option grants during this period. 
 Weighted-AverageWeighted-
    
    
    Remaining
    
    
    AggregateAverage Exercise
    
    
    Contractual Term
    
    
    IntrinsicOptions
    
    
    Price per Share
    
    
    (in years)
    
    
    ValueOutstanding on January 1, 2008
    
    
    3,494,950
    
    
    $
    0.32Granted
    
    
    100,000
    
    
    
    0.71Exercised
    
    
    (1,051,280
    )
    
    
    0.15Forfeited/canceled
    
    
    (503,579
    )
    
    
    0.18Outstanding on September 30, 2008
    
    
    2,040,091
    
    
    $
    0.46
    
    
    
    6.2
    
    
    $
    513,790Exercisable on September 30, 2008
    
    
    1,341,784
    
    
    $
    0.34
    
    
    
    5.4
    
    
    $
    456,988
  Weighted-AverageGrant Date FairShares
    
    
    Value per ShareNon-vested stock options at January 1, 2008
    
    
    866,540
    
    
    $
    0.50Non-vested stock options granted
    
    
    100,000
    
    
    
    0.69Vested stock options
    
    
    (239,000
    )
    
    
    0.14Forfeited stock options
    
    
    (29,233
    )
    
    
    0.49Non-vested stock options at September 30, 2008
    
    
    698,307
    
    
    
    0.65
  Note I  Long-Term Obligations and Credit Lines:
  September 30, 2008
    
    
    December 31, 2007Mortgage note payable bearing interest at
7.75%, payable in monthly installments of
$25,797 through April 2019, collateralized
by land and building, and personally guaranteed
by the Companys Chief Executive Officer
    
    $
    2,230,858
    
    
    $
    2,330,130Capital lease obligation
    
    
    
    
    
    
    1,7662,230,858
    
    
    
    2,331,896Less  current maturities
    
    
    (141,635
    )
    
    
    (135,428
    )$
    2,089,223
    
    
    $
    2,196,468
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Note J  Segments and Geographic Area:
    - 11 -




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##### Table of Contents



Nutritional Products
    
    
    Medical Products
    
    
    ConsolidatedQuarter ended September 30, 2008Net sales
    
    $
    8,284
    
    
    $
    1,641
    
    
    $
    9,925Depreciation and amortization
    
    
    71
    
    
    
    25
    
    
    
    96Operating profit
    
    
    1,294
    
    
    
    93
    
    
    
    1,387Capital expenditures
    
    
    77
    
    
    
    8
    
    
    
    85Total assets
    
    
    18,411
    
    
    
    2,001
    
    
    
    20,412Quarter ended September 30, 2007Net sales
    
    $
    6,705
    
    
    $
    1,152
    
    
    $
    7,857Depreciation and amortization
    
    
    65
    
    
    
    22
    
    
    
    87Operating profit
    
    
    1,101
    
    
    
    77
    
    
    
    1,178Capital expenditures
    
    
    60
    
    
    
    2
    
    
    
    62Total assets
    
    
    15,483
    
    
    
    1,489
    
    
    
    16,972Nine Months ended September 30,
2008Net sales
    
    $
    18,631
    
    
    $
    4,529
    
    
    $
    23,160Depreciation and amortization
    
    
    205
    
    
    
    73
    
    
    
    278Operating profit
    
    
    2,246
    
    
    
    253
    
    
    
    2,499Capital expenditures
    
    
    325
    
    
    
    31
    
    
    
    356Total assets
    
    
    18,411
    
    
    
    2,001
    
    
    
    20,412Nine Months ended September 30, 2007Net sales
    
    $
    17,124
    
    
    $
    3,273
    
    
    $
    20,397Depreciation and amortization
    
    
    206
    
    
    
    69
    
    
    
    275Operating profit
    
    
    2,382
    
    
    
    254
    
    
    
    2,636Capital expenditures
    
    
    153
    
    
    
    2
    
    
    
    155Total assets
    
    
    15,483
    
    
    
    1,489
    
    
    
    16,972
  Quarter Ended September 30, 2008
    
    
    Quarter Ended September 30, 2007Net sales
    
    
    Long-Lived assets
    
    
    Net sales
    
    
    Long-Lived assetsDomestic
    
    $
    2,765
    
    
    $
    6,225
    
    
    $
    2,447
    
    
    $
    5,958Former Soviet Union
    
    
    6,742
    
    
    
    
    
    
    
    4,898
    
    
    
    Canada
    
    
    281
    
    
    
    552
    
    
    
    335
    
    
    
    382All others
    
    
    137
    
    
    
    
    
    
    
    177
    
    
    
    Totals
    
    $
    9,925
    
    
    $
    6,777
    
    
    $
    7,857
    
    
    $
    6,340
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2008
    
    
    September 30, 2007Net sales
    
    
    Long-Lived assets
    
    
    Net sales
    
    
    Long-Lived assetsDomestic
    
    $
    7,904
    
    
    $
    6,225
    
    
    $
    7,529
    
    
    $
    5,958Former Soviet Union
    
    
    13,789
    
    
    
    
    
    
    
    11,314
    
    
    
    Canada
    
    
    876
    
    
    
    552
    
    
    
    1,045
    
    
    
    382All others
    
    
    591
    
    
    
    
    
    
    
    509
    
    
    
    Totals
    
    $
    23,160
    
    
    $
    6,777
    
    
    $
    20,397
    
    
    $
    6,340
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Significant Customers
  Note K  Earnings Per Share:
  WeightedAverageNet Earnings
    
    
    Shares
    
    
    Per ShareQuarter ended September 30, 2008Basic earnings per common share
    
    $
    845,723
    
    
    
    21,587,224
    
    
    $
    0.04Effect of dilutive stock options
    
    
    
    
    
    
    1,318,963Diluted earnings per common share
    
    $
    845,723
    
    
    
    22,906,187
    
    
    $
    0.04Quarter ended September 30, 2007Basic earnings per common share
    
    $
    671,557
    
    
    
    20,424,861
    
    
    $
    0.03Effect of dilutive stock options
    
    
    
    
    
    
    2,377,943Diluted earnings per common share
    
    $
    671,557
    
    
    
    22,802,804
    
    
    $
    0.03Nine Months ended September 30, 2008Basic earnings per common share
    
    $
    1,477,054
    
    
    
    21,314,775
    
    
    $
    0.07Effect of dilutive stock options
    
    
    
    
    
    
    1,608,683Diluted earnings per common share
    
    $
    1,477,054
    
    
    
    22,923,458
    
    
    $
    0.06Nine Months ended September 30, 2007Basic earnings per common share
    
    $
    1,506,857
    
    
    
    20,293,038
    
    
    $
    0.07Effect of dilutive stock options
    
    
    
    
    
    
    2,147,382Diluted earnings per common share
    
    $
    1,506,857
    
    
    
    22,440,420
    
    
    $
    0.07
    - 13 -




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##### Table of Contents



Note L  Comprehensive Income:
  Quarters Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net earnings
    
    $
    845,723
    
    
    $
    671,557
    
    
    $
    1,477,054
    
    
    $
    1,506,857Other comprehensive income (loss):Foreign currency translation
adjustment
    
    
    (18,002
    )
    
    
    10,939
    
    
    
    (35,438
    )
    
    
    26,757Comprehensive income
    
    $
    827,721
    
    
    $
    682,496
    
    
    $
    1,441,616
    
    
    $
    1,533,614
 Note M  Legal Proceedings:
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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
  FORWARD-LOOKING STATEMENTS
  OVERVIEW
  
    
    Through the Nutritional Products segment, we distribute products in three broad categories:
(i) wellness products, (ii) fitness products and (iii) skin care products. Products include
herbal formulas, vitamins, minerals, antioxidants and personal care products. In certain
markets, principally in the U.S. and Canada, we distribute Nutritional Products directly
through a network of independent Associates. In certain other markets, we distribute
Nutritional Products through exclusive license arrangements with third parties who, for the
most part, distribute our products through an independent Associate network in the licensed
territory.
 
    
    Through the Medical Products segment, we distribute wound care products. These products
are distributed mainly in the U.S. to hospitals, nursing homes, clinics and pharmacies through
traditional medical/surgical supply dealers and pharmaceutical distributors. MPMs Medical
Products are used to prevent and treat wounds, and manage pain associated with wounds, in the
acute care, long-term care, oncology and podiatry markets.
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Quarters Ended September 30,2008
    
    
    2007(U.S. dollars in 000s)Nutritional Products:Associate network
    
    $
    1,405
    
    
    
    14
    %
    
    $
    1,630
    
    
    
    21
    %Licensees
    
    
    6,879
    
    
    
    69
    %
    
    
    5,075
    
    
    
    64
    %8,284
    
    
    
    83
    %
    
    
    6,705
    
    
    
    85
    %Medical Products
    
    
    1,641
    
    
    
    17
    %
    
    
    1,152
    
    
    
    15
    %$
    9,925
    
    
    
    100
    %
    
    $
    7,857
    
    
    
    100
    %
 Nine Months Ended September 30,2008
    
    
    2007(U.S. dollars in 000s)Nutritional Products:Associate network
    
    $
    4,352
    
    
    
    19
    %
    
    $
    5,304
    
    
    
    26
    %Licensees
    
    
    14,279
    
    
    
    61
    %
    
    
    11,820
    
    
    
    58
    %18,631
    
    
    
    80
    %
    
    
    17,124
    
    
    
    84
    %Medical Products
    
    
    4,529
    
    
    
    20
    %
    
    
    3,273
    
    
    
    16
    %$
    23,160
    
    
    
    100
    %
    
    $
    20,397
    
    
    
    100
    %
 Associate Network
 Quarters Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007United States
    
    
    80
    %
    
    
    79
    %
    
    
    80
    %
    
    
    80
    %Canada
    
    
    20
    
    
    
    21
    
    
    
    20
    
    
    
    20100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  Licensees.
  Medical Products.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   RESULTS OF OPERATIONS
  Quarters Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    52.5
    
    
    
    47.1
    
    
    
    48.6
    
    
    
    44.8Gross profit
    
    
    47.5
    
    
    
    52.9
    
    
    
    51.4
    
    
    
    55.2Operating expenses:General and administrative
    
    
    26.5
    
    
    
    29.2
    
    
    
    32.1
    
    
    
    31.7Distributor commissions
    
    
    6.1
    
    
    
    7.7
    
    
    
    7.4
    
    
    
    9.3Depreciation and amortization
    
    
    0.9
    
    
    
    1.0
    
    
    
    1.1
    
    
    
    1.3Total operating expenses
    
    
    33.5
    
    
    
    37.9
    
    
    
    40.6
    
    
    
    42.3Operating profit
    
    
    14.0
    
    
    
    15.0
    
    
    
    10.8
    
    
    
    12.9Interest expense
    
    
    0.5
    
    
    
    0.7
    
    
    
    0.6
    
    
    
    0.8Earnings before income taxes
    
    
    13.5
    
    
    
    14.3
    
    
    
    10.2
    
    
    
    12.1Provision for income taxes
    
    
    5.0
    
    
    
    5.8
    
    
    
    3.8
    
    
    
    4.7Net earnings
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    6.4
    %
    
    
    7.4
    %
 Quarter ended September 30, 2008 compared with quarter ended September 30, 2007
 Net sales.
 Associate Network
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Licensees
 Medical products.
 Cost of sales.
 General and administrative.
 Distributor commissions.
 Income taxes.
 Net earnings.
 Nine months ended September 30, 2008 compared with nine months ended September 30, 2007
 Net sales.
 Associate Network
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Licensees
 Medical products.
 Cost of sales.
 General and administrative.
 Distributor commissions.
 Income taxes.
 Net earnings.
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LIQUIDITY AND CAPITAL RESOURCES
 Cash and working capital.
 Operating activities
 Investing activities.
 Financing activities
 General liquidity and cash flows .
  
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
  Foreign exchange
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Interest rates
  
 ITEM 4. Controls and Procedures.
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PART II  OTHER INFORMATION
 
 ITEM 1. Legal Proceedings.
  
 ITEM 1A. Risk Factors.
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 ITEM 3. Defaults Upon Senior Securities.
  
 ITEM 4. Submission of Matters to a Vote of Security Holders.
  
 ITEM 5. Other Information.
  
 ITEM 6. Exhibits.
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SIGNATURES
  RBC Life Sciences, Inc.
RegistrantNovember 11, 2008
    By:
    /s/ Clinton H. HowardDate
    
    Its: Chief Executive OfficerNovember 11, 2008
    By:
    /s/ Steven E. BrownDate
    
    Its:      Vice President-Finance andChief Financial Officer
(Principal Financial and Accounting Officer)  - 23 -




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RBC LIFE SCIENCES, INC.
 
 Exhibit Index
 Exhibit Number
    
    Description31.1
    
    
    Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Principal Executive Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    
    Certification of Principal Financial Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
  - 24 -