Mannatech (MTEX) 8-K Mannatech Reports First Quarter Financial Results

Exhibit 99.1

Mannatech Reports First Quarter Financial Results

Coppell, TX, May 15, 2003 – Mannatech, Incorporated (NASDAQ – MTEX) today reported its net sales for the first quarter ended March 31, 2003 reached $40.5 million and net income totaled $1.4 million, or $0.06 earnings per share. Comparable 2002 quarterly net sales were $32.9 million and net income was $0.6 million, or $0.02 earnings per share.

Net sales for the first quarter of 2003 increased $7.6 million, or 23.1% as compared to the same period in 2002. In the first quarter of 2003, 28,000 more associates and members joined Mannatech compared to 19,000 more associates and members for the first quarter of 2002, which was a gain of 47.4%. Net sales increased for the three months ended March 31, 2003 in North America, Australia, the United Kingdom, Japan and New Zealand, with a slight decline in Canada, compared to the same period in 2002.

Net income for the three months ended March 31, 2003 increased 133.3% to $1.4 million as compared to the same period in 2002. This increase was achieved despite recognition of approximately $1.0 million of costs for Mannafest, Mannatech’s annual sales event, which was held in March of 2003 as compared to April of 2002.

On April 15, 2003, Samuel L. Caster was unanimously appointed by our Board of Directors to serve as our Chief Executive Officer (“CEO”). Mr. Caster, Chairman and CEO stated, “Our exceptional first quarter results are directly attributable to the focus and drive of our associates as they spread the knowledge of our products around the world. Our international markets, under new management, have added immensely to our level of success. The addition of Steve Lemme, our new Senior Vice President of Sales, should further provide greater support to our independent associates while also helping Mannatech achieve its objectives of continued growth and profitability.”

In the second quarter of 2003, Mannatech intends to take a charge of approximately $1.3 million for severance costs related to the resignation of its former CEO.

For nearly a decade, Mannatech has considered itself a wellness solution provider that develops innovative, high-quality, proprietary nutritional supplements, weight management products and topical products that are sold through a global network-marketing system throughout the United States and the international markets of Canada, Australia, the United Kingdom, Japan and New Zealand.

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 statements are subject to certain events, risks and uncertainties that may be outside of Mannatech’s control. Actual results and developments could materially differ from those expressed in or implied by such statements due to a number of factors. In some cases, forward-looking statements may be identified by terminology such as “may,” “should,” “believes,” or “approximates,” or the negative of such terms and other comparable terminology. Although Mannatech believes that the expectations reflected in these forward-looking statements are reasonable, it cautions its readers to consider the risk factors and any other cautionary statements in this release, as well as those set forth in Mannatech’s filings with the Securities and Exchange Commission. All of the forward-looking statements contained herein speak only as of the date of this press release.

Contact: Steve Fenstermacher, CFO (972) 471-6512 orIR@mannatech.com

Exhibit 99.1

MANNATECH, INCORPORATED

CONSOLIDATED BALANCE SHEETS—UNAUDITED

(in thousands, except share amounts)

	December 31, 2002			March 31, 2003
ASSETS
Cash and cash equivalents	$	17,693		$	17,366
Restricted cash		—			2,123
Accounts receivable		632			405
Income tax receivable		307			307
Current portion of notes receivable from shareholders, net of allowance of $31 in 2002 and 2003		143			143
Inventories		5,515			5,902
Prepaid expenses and other current assets		759			1,134
Deferred tax assets		1,013			1,015
Total current assets		26,062			28,395
Property and equipment, net		7,467			7,002
Notes receivable from shareholders, excluding current portion		247			198
Other assets		1,040			1,047
Total assets	$	34,816		$	36,642
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current portion of capital leases and notes payable	$	136		$	40
Accounts payable		1,846			1,273
Accrued expenses		13,739			14,817
Current portion of accrued severance related to former executives		810			565
Total current liabilities		16,531			16,695
Capital leases and notes payable, excluding current portion		8			7
Accrued severance, related to former executives, excluding current portion		150			75
Deferred tax liabilities		77			79
Other long-term liabilities		—			253
Total liabilities		16,766			17,109
Commitments and contingencies		—			—
Shareholders’ equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.0001 par value, 99,000,000 shares authorized, 25,162,541 shares issued and 25,134,840 outstanding in 2002 and 2003, respectively		3			3
Additional paid-in capital		18,168			18,193
Retained earnings		481			1,900
Accumulated other comprehensive loss—foreign currency translation adjustment		(502	)		(463	)
		18,150			19,633
Less treasury stock, at cost, 27,701 shares in 2002 and 2003		(100	)		(100	)
Total shareholders’ equity		18,050			19,533
Total liabilities and shareholders’ equity	$	34,816		$	36,642

Exhibit 99.1

MANNATECH, INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED

FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2003

(in thousands, except per share information)

	Three months ended March 31,
	2002			2003
Net sales	$	32,926		$	40,470
Cost of sales		5,903			6,697
Commissions and incentives		13,821			16,341
		19,724			23,038
Gross profit		13,202			17,432
Operating expenses:
Selling and administrative expenses		7,502			9,830
Other operating costs		4,536			5,725
Total operating expenses		12,038			15,555
Income from operations		1,164			1,877
Interest income		74			76
Interest expense		(6	)		(2	)
Other income (expense), net		(17	)		112
Income before income taxes		1,215			2,063
Income taxes		(619	)		(644	)
Net income	$	596		$	1,419
Earnings per common share:
Basic	$	0.02		$	0.06
Diluted	$	0.02		$	0.06
Weighted-average common shares outstanding:
Basic		25,135			25,135
Diluted		25,269			25,251