Mannatech Reports Second Quarter 2013 Financial Results

  Mannatech Reports Second Quarter 2013 Financial Results

Business Wire

COPPELL, Texas -- July 31, 2013

Mannatech, Incorporated  (NASDAQ: MTEX), a leading developer and provider of
nutritional supplements and skin care products based on Real Food Technology^®
solutions, today reported a net income of $0.8 million, or $0.30 per diluted
share, for the second quarter ending June 30, 2013, as compared to a net loss
of $2.5 million, or $0.93 per diluted share, for the second quarter of 2012.
Net sales for the second quarter of 2013 were $44.8 million, an increase of
2.7% as compared to $43.6 million in the second quarter of 2012.

Net sales for North America declined 6.6% to $21.3 million as compared to
$22.8 million in the second quarter of 2012. This decline in revenue was
primarily due to a decrease in the revenue generated per active associate and
member.

Net sales for Asia/Pacific increased 17.1% to $19.9 million as compared to
$17.0 million in the second quarter 2012 due to an increase in the number of
active associates. This increase in revenue was due to an increase in the
number of active associates and members and an increase in the revenue
generated per active associate and member.

Net sales for Europe, the Middle East and Africa (“EMEA”) declined 5.2% to
$3.6 million as compared to $3.8 million in the second quarter of 2012. This
decline was due to the unfavorable impact on net sales of fluctuations in
foreign currency exchange rates.

Recruiting increased 31.2% in the second quarter 2013 as compared to the
second quarter of 2012. The number of new independent associates and members
for the second quarter of 2013 was approximately 36,200, as compared to 27,600
in 2012. The total number of independent associates and members based on a
12-month trailing period was approximately 240,000 as of June 30, 2013, as
compared to 230,000 as of June 30, 2012.

Dr. Robert Sinnott, CEO & Chief Science Officer, commented, “We are optimistic
the business climate will continue to improve. The net increase in active
associates and members appears to be reversing the sales trend and our
continual improvement in operating efficiencies is producing profit as well as
positive cash flow.”

Mannatech will host a conference call to discuss the quarter’s results with
investors on Wednesday, August 7, 2013 at 9a.m. CDT, 10 a.m. EDT. The live
call will be webcast and can be accessed on Mannatech’s website at
http://ir.mannatech.com.

For those unable to listen to the live broadcast, a replay will be available
shortly after the call. The toll-free replay number is (855) 859-2056
(International (404) 537-3406); the Conference ID to access the call is
25004753.

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

                                                
CONSOLIDATED BALANCE SHEETS – (UNAUDITED)

(in thousands, except share and per share amounts)
                                                                             
                                                  June 30,      December 31,
                                                  2013          2012
ASSETS                                            (unaudited)
Cash and cash equivalents                         $  17,787     $   14,377
Restricted cash                                      1,513          1,515
Accounts receivable, net of allowance of $89         246            324
and $20 in 2013 and 2012, respectively
Income tax receivable                                19             884
Inventories, net                                     14,165         15,154
Prepaid expenses and other current assets            3,045          2,487
Deferred tax assets                                  578            561
Total current assets                                 37,353         35,302
Property and equipment, net                          3,832          4,825
Construction in progress                             —              8
Long-term restricted cash                            4,231          3,736
Other assets                                         2,942          3,187
Long-term deferred tax assets                        621            502
Total assets                                      $  48,979     $   47,560
                                                                             
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current portion of capital leases                 $  906        $   780
Accounts payable                                     5,719          4,154
Accrued expenses                                     7,411          6,348
Commissions and incentives payable                   6,235          7,373
Taxes payable                                        3,684          3,901
Current deferred tax liability                       271            179
Deferred revenue                                     1,504          1,486
Total current liabilities                            25,730         24,221
Capital leases, excluding current portion            700            938
Long-term deferred tax liabilities                   7              2
Other long-term liabilities                          1,679          2,178
Total liabilities                                    28,116         27,339
                                                                             
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, 2,768,972 shares issued and       —              —
2,647,735 shares outstanding
Additional paid-in capital                           42,626         42,614
Accumulated deficit                                  (5,492   )     (6,920   )
Accumulated other comprehensive loss                 (1,475   )     (677     )
Less treasury stock, at cost, 121,237 shares in      (14,796  )     (14,796  )
2013 and 2012
Total shareholders’ equity                           20,863         20,221
Total liabilities and shareholders’ equity        $  48,979     $   47,560

                                                     
CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)

(in thousands, except per share information)
                                                         
                               Three months ended        Six months ended
                               June 30,                  June 30,
                               2013       2012           2013       2012
Net sales                      $ 44,801   $ 43,611       $ 86,467   $ 88,113
Cost of sales                    8,694      8,852          16,391     17,127
Gross profit                     36,107     34,759         70,076     70,986
                                                                      
Operating expenses:
Commissions and incentives       19,181     18,637         36,722     37,622
Selling and administrative       8,541      9,945          17,172     19,600
Depreciation and                 588        921            1,225      3,379
amortization
Other operating costs            6,247      6,662          12,752     13,847
Total operating expenses         34,557     36,165         67,871    74,448
                                                                      
Income (loss) from               1,550      (1,406 )       2,205      (3,462 )
operations
Interest income (expense)        17         21             4          (32    )
Other income (expense), net      (1,420 )   (805   )       (1,003 )   87     
Income (loss) before income      147        (2,190 )       1,206      (3,407 )
taxes
                                                                      
Provision for income taxes       637        (265   )       222        (448   )
Net income (loss)              $ 784     $ (2,455 )     $ 1,428   $ (3,855 )
                                                                      
Income (loss) per share:
Basic                          $ 0.30    $ (0.93  )     $ 0.54    $ (1.46  )
Diluted                        $ 0.30    $ (0.93  )     $ 0.54    $ (1.46  )
                                                                      
Weighted-average common
shares outstanding:
Basic                            2,648      2,648          2,648      2,648
Diluted                          2,655      2,648          2,658      2,648

The approximate number of new and continuing independent associates and
members who purchased our packs or products during the twelve months ended
June 30 was as follows:

             2013                  2012              
New            108,000   45.0  %     87,000    37.8  %
Continuing     132,000     55.0  %     143,000     62.2  %
Total          240,000     100.0 %     230,000     100.0 %

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 North America, Asia/Pacific, and EMEA. 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,” “intend” 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 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.

Contact:

Mannatech, Incorporated
Donna Giordano, 972-471-6512
Manager, Executive Office Administration
ir@mannatech.com
www.mannatech.com
 
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