MTEX - Earnings call transcript Q4 2018

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Operator

Greetings, and welcome to the Mannatech, Incorporated Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode.

As a reminder, this conference is being recorded.

Now I'd like to introduce our moderator for today's call Mr. David Johnson, Chief Financial Officer. Mr. begin. may you Johnson,

David Johnson

and morning, fourth is call. quarter from Mannatech's will Good Al welcome Today Johnson, to hear President and me; Mannatech's of both Executive everyone. you. Officer, David Bala. This and you Chief Thank XXXX earnings

begin will first the statement. Safe read I call, we the Harbor Before

make During financial performance. may which involve forward-looking this conference call, future can statements, we events future or

plans, or intends, identified terminologies can beliefs, continues Forward-looking be by could, the would, of and should, statements predicts, expects, as such approximate, phrases anticipates, may, estimate, potential, projects, will, generally use hopes, or We only uncertainties speak other similar words and are or forward-looking risks, the and negative factors as of of caution such that subject terminology. other events, today. listeners to certain statements such

to time, At listeners comments SEC also results. few a refer I make our review this XXXX concerning operating our submissions. our will We

$X.X Net as XXXX. operations to in the Our a fourth XXXX. in $X.X was the XXXX $X.X share per quarter per for for of $X.X of the of to diluted quarter compared fourth the income diluted million loss million or from operations $X.XX million or loss loss XXXX share period as quarter million $X.XX compared for from was same fourth

the diluted $X.X was as for For during of or per compared income fourth million in $X.XX share $XX sales per compared year XXXX. XXXX. $X.X or loss $X.X from to a XXXX million diluted compared to net XXXX. Net of $XX.X X% million, loss million the quarter $X.X of Fourth share were from to XXXX, of quarter for $X.XX as decrease operations million net or operations as a million $X.X million loss was

X.X%. Favorable same December XX.X% of improved sales to for during net three our as of million. Gross year the XX.X% compared foreign period XX, increased exchange for percentage profit sales XXXX, the a XXXX, months as to During ending sales XXXX. by $X.X the declined

compared sales for a net the ending during XX, of XX.X% of three a XX.X% were percentage compared as year. same XX.X% costs Incentive percentage the the as percentage sales as to during sales compared gross net XXXX, net for same XX.X% months sales December were for period prior XXXX, for to year for as period to in to the XX, were a XXXX. as XXXX period as XXXX, XX.X% XXXX, months a as the the XX.X% of Commissions percentage of to X.X% X.X% X.X% XXXX. profit During of same were a net costs XXXX. X.X% Commissions to for compared ending improved as of December Incentive compared XXXX. of as the sales three for percentage

ending to as three decreased to million costs, the and $X.X in XX, and million in million, costs in costs. administrative selling expenses December related for period same administrative months $X.X For $X.X $X.X XXXX, primarily selling decrease and the and $X.X million marketing expenses million payroll of XXXX. a a by decrease overall of warehouse compared decrease consisted The

as selling $X.X decreases $XX.X selling in The million stock million $X.X $XX.X in increase overall by $X.X costs. administrative expenses decrease comparative prior in we and These in payroll XXXX, of period and to marketing related compensation were expense. the For million decrease consisted and XX, greater employees offset the in year, administrative of costs partially had expenses or $X.X XXXX. a decrease compared as the ending number for X.X% based million in period a December a decreased same million million to

in to primarily to associated XXXX. increased $X.X period for legal costs For well in was The with as our an operating corporate fees entertainment by million as and $X.X ending and XX, sponsored compared the consulting in events. other other decrease increase the XXXX, travel costs costs months December million three $X.X as million operating due same to

XX, in XXXX, XXXX. to $XX.X increase increased increase corporate million A with $X.X million auto the attributed expense, increase increase of a and costs million same in and year costs decrease costs. $X.X fees for to million fees, in a to ending $X.X headquarters. and period For legal other a by credit decrease office million $X.X associated largely by million in in the due operating fees The new $XX.X December the entertainment $X.X was auditing million increase to lease million non-recurring accounting as $X.X million, $X.X $X.X in $X.X a expenses, or travel million in card increase sponsored moving events, million bad a in compared and corporate offset to a XX.X% consulting costs debt a equipment

year XXXX, period of ending million. tax the our XXXX, and XX, comparable For $X.X $X.X was million for December provision the

impact recorded Act the For result and XXXX, the in low the the on Cuts year. last income, as the allowance GILTI, company's passed intangible of jurisdictions, provision impacted jurisdictions, a certain earnings Tax the Jobs tax and valuation was mix global of losses of across by

fourth XXXX and the of associates its and in new of change the independent of For The approximately to the impact quarter included number XXXX packs the of positions of in preferred XX,XXX adjustments this held compared respectively. the X.X% preferred customer Section Tax company's XXXX, customer Transition network quarter number were that positions in a approximately Items to quarter $XXX,XXX decreased in Mannatech's of and at individuals due XXXX, assets $XX.X company XXXX. Recruiting continuing XXX the as $X.X $XXX,XXX the as and purchases December XXXX. million defined XXXX Act. capital had current increasing provision fourth was liabilities fourth compared total XX, The XX, to balance total the XX, December valuation XX,XXX XXXX and XXXX. in and as with return to compared in reviewing million year current significant rate products new our XX, December and December decreased The network, increase at XXXX, In in sheet as provision the to associates plus of and of working allowance. as and to and associated at approximate by independent our prior

our turns XXXX. X.XX During goods, XXXX, during inventory compared X.XX to decreased finished to

Our as to balances million to increased XXXX $XX.X as at Total $X.X at net increased inventory compared million XX, $XX.X December million million December XXXX. December XXXX, XX, XX, million to $X.X XX, December $XX.X at compared to liabilities by current XXXX. at

decreased to $XX.X million million Our XXXX. by XX, and cash restricted cash at compared hand $XX.X balance cash to million as December a and of $XX.X equivalents on

inflow million for XXXX XXXX. as $XX.X the million outflow during $XX.X net period of compared same Our net cash was cash to a of

operations on For used generated XXXX, in fund to the December to profitability, sales of XX, we operations period compared year-ending cash. and million XXXX cash when declining $X.X same $XX.X is the million

in ending improvements During million XX, million and $X.X $X.X we equipment. for and furniture year the invested XXXX, $X.X December software leasehold in and and million hardware office computer

year-ending financing capital For XX, for activities lease $X.X our the December of XXXX, obligations. included repayment million

are over I stock. the We $X.X million million the will dividends shareholders shareholder CEO to At in time, our Bala. with and call to turn for Mr. to Al paid Mannatech's common this repurchase return value proud of $X.X

Al Bala

and I'm us on for Thank and And everyone. CEO and the discuss XXXX. year Al President. the for our fourth Bala, generally XXXX. you hello, David, earnings I'll quarter fourth Mannatach's thank you, joining And quarter call company's

season, the quarter in holiday of the profitable change And yield for also to year that operating an the million. had for quarter activities top our but served Korea, fourth during down which same and newly was leadership this. the sales revenues, was largest compared general outlined South a two embraces David promotional X% net last As the our margin strengthen to our There shift with a leadership primary our $X.X senior experienced Number less one, sales temporary well. are slowdown turnaround intentional as hired reasons manager. to loss in from market already begun impacted as We has market.

the year are million compared in loss. operation There our for loss was income from reasons for of to at XXXX. primary However, overall three $X.X flat $XX,XXX from operations XXXX, this

margin million to shipping up Kong, warehousing very move our Firstly, as We would Hong experienced sacrifice this, going and costs. knew, up $X strategic higher we is that margins in and scaled have in place into as we plan we XXXX. An we in these continued market expression. for capabilities infrastructure aggressive customer logistic our support better correcting our experience for to scale short time

manifest. than higher issues a global Management events these our and to on in summit, incentives, developed to control Hong has Kong, planned, of participation, processes global due our leadership in kinds especially cost Korean three our anticipated than specifically our Secondly, prevent future. the expenditures were major and higher

a independent sales helped a move customers to Mound, we in million feel efforts better as program Flower serve a in and employees, growth. positioned Thirdly, investment building in new relocation new the Texas. those avoiding non-recurring headquarters products incurred and to for the our relocation made new increase. cost rent us while to the We along our This large composition well associates, the $X.X launching several that

The first Ambrotose new launched we XXXX product was LIFE. in

most it products our introduced and Ambrotose for U.S. years. in a markets the about XX in offerings. LIFE Ambrotose throughout Ambrotose improvement in other have echo XXXX been early the Ambrotose Our marked LIFE launched We significant year. in

and all an Substance The recently EMPACT+ professional athletes. Olympic in professional leagues, BSCG, allowing product Control performance approval Banned and second new amateur organizations, all-in-one from Group, XXXX EMPACT+ by was CAA, the use we sports launched mix. received drink and sports its

new fourth limited-time product introduced launched the Men's quickly we've PRIME man This as X. product third held in The only quarter, and Mannatech was product XXXX out. sold in was comprehensive the

also rolling line. we've it into associate make It It to in make shakes. it additional and for Uth a it addition made only Lash rapidly, help and addition sold be product these limited-time for fourth have our products permanent is easier have to our is cosmetic TruPLENISH first is begin and we EMPACT+, a line permanent product LIFE made news our introduced out it Serum. markets. it product conversations, to quarter. -- a XXXX also product was settling and fourth as our -- a to the our We in now we program we'll The product out introduced Ambrotose sampling launched new To

of that associates bear We attract is ranks growth independent a fruit. attracted preferred that we we associates new months. independent welcome and leading to believe We customers XX new have begun it on the closely. And XX,XXX and a indicator to customers very creating and will our has We continued watch recruiting into that to preferred last company. our culture focus the over

across look globe, continues activity to we in As the in particularly Asia well, Kong. Hong our go

the a and of the maturation For preferred foundation we in revenue customer, surrounding release per of increase by Overall, by million, XXXX, Ambrotose explained Hong $X.X to plan. Asia Korea. X.X% which sales LIFE can be which of in in we saw the of tune XX.X% and excitements compensation the the the attribute impart largely active due year Kong increased associate to to accounts

market. incentives revenues up the Thailand year-over-year. incentivize for the with region, Kong down and and Greater East Hong Our South to in Kong Middle sales slightly helped China In Across the as Europe the order Africa, about growth overall, shifting to Africa or also grow were value the and EMEA China. X.X% Americas, to continued revenue Hong continues Greater

year to this recorded double-digit spot associate Mexico, and of new enrollment continues bright the both growth volume which preferred sales be in customers. independent and Our

be to marketing our in it attracting working a strategic language has effort the been many been very customers have We new recruiting to to And new and and attracting and so associates. a and network associates. positive strengthen independent proposition sign both

very speaking and of such development audience We as where is in North are Chinese State. America, the facilitating California growing in Washington hotspots Texas, strategically the

the buyback return shareholders Board have more Directors, second Lastly, our XXXX. we the dividend commitment point that our during the quarter highlights in shareholder of increasing third cash $X.XX These stock our dividends [indiscernible] by of payments -- with increase to it to made value. to share continuing with constant to and to temporarily a per recent

and and bottom-line Thank programs, As by in program institutional and of strategically continuing profitability. we our shareholder development and of committed call invest you to on a to the for which we to today. line growth new here can remain remain us top control improve value, a continued cost -- joining products create a

Operator

call. you Thank earnings the for XXXX listening Mannatech's quarter fourth

company's submissions. concludes the by the and can on found the SEC or company's call. be Relations website, reminder, ir.mannatech.com, a As filings at This reviewing information today's Investor

Mannatech (MTEX) 12 Mar 192018 Q4 Earnings call transcript