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 firstname.lastname@example.org www.mannatech.com
Mannatech Reports Second Quarter 2013 Financial Results
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