Mannatech Reports Fourth Quarter and Year End Results

  Mannatech Reports Fourth Quarter and Year End Results

Business Wire

COPPELL, Texas -- March 22, 2013

Mannatech, Incorporated  (NASDAQ: MTEX), a leading developer and provider of
nutritional supplements and skin care products based on Real Food Technology^®
solutions, today announced financial results for its fourth quarter and year
end 2012.

Fourth Quarter Results

Fourth quarter net sales for 2012 were $42.3 million, a decrease of 11.7%
compared to $47.9 million in the fourth quarter of 2011. Net sales for United
States and Canada declined 14.4% to $20.2 million compared to $23.6 million in
the fourth quarter of 2011. International net sales of $22.1 million decreased
9.1% compared to $24.3 million in the fourth quarter of 2011.

Net income was $0.3 million, or $0.10 per diluted share, for the fourth
quarter of 2012, compared to net loss of ($7.0 million), or ($2.63) per
diluted share, for the fourth quarter of 2011.

Dr. Robert Sinnott, CEO & Chief Science Officer, commented, “Mannatech has
achieved profitability in the last half of 2012. This is an important
milestone in our financial recovery. We believe our strategies for 2013 will
continue to increase our cash flow and improve the current sales trends.”

Year End Results

Annual net sales for 2012 were $173.4 million, down 13.6% from $200.7 million
for 2011. The company reported a net loss for 2012 of $1.4 million, compared
to a net loss of $20.7 million in 2011. The loss per share was $0.52 in 2012,
compared to the loss per share of $7.80 in 2011.

The total number of independent associates and members based on a 12-month
trailing period was approximately 229,000 as of each of December 31, 2012 and
2011. The number of new independent associates and members for 2012 was
97,000, compared to 77,000 in 2011, which was an increase of 20,000 over the
previous year.

Dr. Robert Sinnott further commented, “We are pleased our consumers and
independent business builders have accepted our newest product, NutriVerus,
which was launched globally during 2012. We believe this product acceptance,
as well as the increase in the number of new independent associates and
members recruited in 2012 over 2011, illustrates our field’s dedication to the
Mannatech brand.”

Investors interested in additional information about our financial results for
2012 and upcoming strategy for 2013 can access our Quarterly Earnings Archive
at http://ir.mannatech.com.

Individuals interested in Mannatech’s products or in exploring its business
opportunity can learn more at mannatech.com.

About Mannatech

Mannatech, Incorporated, develops high-quality health, weight and fitness, and
skin care products that are based on the solid foundation of nutritional
science and development standards. Mannatech is dedicated to its platform of
Social Entrepreneurship based on the foundation of promoting, aiding and
optimizing nutrition where it is needed most around the world. Mannatech’s
proprietary products are available through independent sales associates around
the globe including the United States, Canada, South Africa, Namibia,
Australia, New Zealand, Austria, Denmark, Germany, Norway, Sweden, the
Netherlands, the United Kingdom, Japan, Taiwan, Singapore, Estonia, Finland,
the Republic of Ireland, the Czech Republic, the Republic of Korea and Mexico.
For more information, visit Mannatech.com.

Please Note: This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E
of the Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995. These forward-looking statements generally can
be identified by use of phrases or terminology such as “anticipate,”
“believe,” “will” or other similar words or the negative of such terminology.
Similarly, descriptions of Mannatech’s objectives, strategies, plans, goals or
targets contained herein are also considered forward-looking statements.
Mannatech believes this release should be read in conjunction with all of its
filings with the United States Securities and Exchange Commission and cautions
its readers that these forward-looking statements are subject to certain
events, risks, uncertainties, and other factors. Some of these factors
include, among others, Mannatech’s inability to attract and retain associates
and members, increases in competition, litigation, regulatory changes, and its
planned growth into new international markets. Although Mannatech believes
that the expectations, statements, and assumptions reflected in these
forward-looking statements are reasonable, it cautions readers to always
consider all of the risk factors and any other cautionary statements carefully
in evaluating each forward-looking statement in this release, as well as those
set forth in its latest Annual Report on Form 10-K and Quarterly Report on
Form 10-Q, and other filings filed with the United States Securities and
Exchange Commission, including its current reports on Form 8-K. All of the
forward-looking statements contained herein speak only as of the date of this
release.

                                                   
CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share information)
                                                     
                                                     December 31,
                                                      2012       2011    
ASSETS
Cash and cash equivalents                            $ 14,377      $ 18,057
Restricted cash                                        1,515         1,263
Accounts receivable, net of allowance of $20 and       324           304
$22 in 2012 and 2011, respectively
Income tax receivable                                  884           888
Inventories, net                                       15,154        17,786
Prepaid expenses and other current assets              2,487         2,497
Deferred tax assets                                   561         936     
Total current assets                                   35,302        41,731
Property and equipment, net                            4,825         9,566
Construction in progress                               8             —
Long-term restricted cash                              3,736         3,386
Other assets                                           3,187         2,815
Long-term deferred tax assets                         502         772     
Total assets                                         $ 47,560     $ 58,270  
                                                                   
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current portion of capital leases                    $ 780         $ 852
Accounts payable                                       4,154         4,825
Accrued expenses                                       6,348         10,514
Commissions and incentives payable                     7,373         8,567
Taxes payable                                          3,901         3,364
Current deferred tax liability                         179           185
Deferred revenue                                      1,486       1,569   
Total current liabilities                              24,221        29,876
Capital leases, excluding current portion              938           1,358
Long-term deferred tax liabilities                     2             1
Other long-term liabilities                           2,178       5,382   
Total liabilities                                      27,339        36,617
                                                                   
Commitments and contingencies
                                                                   
Shareholders’ equity:
Preferred stock, $0.01 par value, 1,000,000 shares     —             —
authorized, no shares issued or outstanding
Common stock, $0.0001 par value, 99,000,000 shares
authorized, 2,759,858 shares issued and
2,647,735 shares outstanding as of December 31,        —             —
2012 and 2,769,756 shares issued and
2,648,518 shares outstanding as of December 31,
2011
Additional paid-in capital                             42,614        42,408
Accumulated Deficit                                    (6,920  )     (5,532  )
Accumulated other comprehensive loss                   (677    )     (427    )
Less treasury stock, at cost, 121,237 shares in       (14,796 )    (14,796 )
2012 and 2011
Total shareholders’ equity                            20,221      21,653  
Total liabilities and shareholders’ equity           $ 47,560     $ 58,270  

                                                  
CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)

(in thousands, except per share information)
                                                     
                           Three months ended        Twelve months ended
                           December 31,              December 31,
                             2012        2011         2012         2011
Net sales                  $ 42,285     $ 47,906     $ 173,447     $ 200,689
Cost of sales               8,817      10,247     34,641      38,515  
Gross profit                 33,468       37,659       138,806       162,174
                                                                   
Operating expenses:
Commissions and              17,544       20,782       73,823        87,426
incentives
Selling and                  8,936        10,555       37,176        47,821
administrative
Depreciation and             673          2,565        4,755         10,697
amortization
Other operating (1)         4,922      9,847      24,032      33,119  
Total operating expenses    32,075     43,749     139,786     179,063 
                                                                   
Income/(Loss) from           1,393        (6,090 )     (980    )     (16,889 )
operations
Interest income              76           120          50            117
Other income (expense),     88         (12    )    630         (1,106  )
net
Income/(Loss) before         1,557        (5,982 )     (300    )     (17,878 )
income taxes
(Provision) benefit for     (1,303 )    (986   )    (1,088  )    (2,781  )
income taxes
Net Income/(Loss)          $ 254       $ (6,968 )   $ (1,388  )   $ (20,659 )
                                                                   
Income/(Loss) per common
share:
Basic                      $ 0.10      $ (2.63  )   $ (0.52   )   $ (7.80   )
Diluted                    $ 0.10      $ (2.63  )   $ (0.52   )   $ (7.80   )
                                                                   
Weighted-average common
shares outstanding:
Basic                       2,648      2,649      2,648       2,649   
Diluted                     2,648      2,649      2,648       2,649   

(1) Mannatech recorded a reduction to the long-term accrued royalty liability
in the fourth quarter which favorably impacted other operating expenses by
$0.8 million in 2012 and $0.1 million in 2011.

The approximate number of new and continuing independent associates and
members who purchased our packs or products during the twelve months ended
December 31 was as follows:

              2012                2011
New              97,000    42  %     77,000    33  %
Continuing       132,000     58  %     152,000     66  %
Total            229,000     100 %     229,000     100 %

Contact:

Mannatech, Incorporated
Brett Duncan, 972-471-7367
bduncan@mannatech.com
or
Donna Giordano, 972-471-6512
Manager, Executive Office Administration
ir@mannatech.com
www.mannatech.com
 
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