Mannatech Reports Fourth Quarter and Year End Results
(COPPELL, Texas) March 22, 2012 – 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.
Contact Information:
Donna Giordano
Manager, Executive Office Administration
972-471-6512
ir@mannatech.com
www.mannatech.com
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 $22 in 2012 and 2011, respectively | | | 324 | | | | 304 | |
| 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 2012 and 2011 | | | (14,796 | ) | | | (14,796 | ) |
| 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 December 31, | | | Twelve months ended 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 incentives | | | 17,544 | | | | 20,782 | | | | 73,823 | | | | 87,426 | |
| Selling and administrative | | | 8,936 | | | | 10,555 | | | | 37,176 | | | | 47,821 | |
| Depreciation and amortization | | | 673 | | | | 2,565 | | | | 4,755 | | | | 10,697 | |
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 operations | | | 1,393 | | | | (6,090 | ) | | | (980 | ) | | | (16,889 | ) |
| Interest income | | | 76 | | | | 120 | | | | 50 | | | | 117 | |
| Other income (expense), net | | | 88 | | | | (12 | ) | | | 630 | | | | (1,106 | ) |
| Income/(Loss) before income taxes | | | 1,557 | | | | (5,982 | ) | | | (300 | ) | | | (17,878 | ) |
| (Provision) benefit for income taxes | | | (1,303 | ) | | | (986 | ) | | | (1,088 | ) | | | (2,781 | ) |
| 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 | % |
