-
2014 Net Sales increase 7.1%
-
2014 Operating Income increase 167.9%
-
2014 Net Income increase 104.7%
COPPELL, Texas--(BUSINESS WIRE)--Mar. 4, 2015--
Mannatech,
Incorporated (NASDAQ: MTEX),
the founder of the M5MSM
(Mission 5 MillionSM) social entrepreneurial movement,
the pioneer of nutritional glycobiology and the global innovator of
naturally sourced supplements based on Real
Food Technology® solutions, today announced financial
results for its fourth quarter and year end 2014.
Fourth Quarter Results
Fourth quarter net sales for 2014 were $45.2 million, a decrease of 2.8%
as compared to $46.5 million in the fourth quarter of 2013. Our net
sales increased 0.6% in constant dollars, which is a non-GAAP financial
measure that excludes the impact of fluctuations in foreign currency
exchange rates.
Net income was $1.9 million, or $0.68 per diluted share, for the fourth
quarter of 2014, compared to net income of $2.6 million, or $0.94 per
diluted share, for the fourth quarter of 2013.
For the three months ended December 31, 2014, our operations outside of
North America accounted for approximately 57.5% of our consolidated net
sales, whereas in the same period in 2013, our operations outside of
North America accounted for approximately 53.3% of our consolidated
sales.
For the three months ended December 31, 2014, net sales for Asia/Pacific
increased by $0.9 million, or 4.4%, to $21.5 million as compared to
$20.6 million for the same period in 2013. The increase in net sales is
primarily due to $0.1 million in net deferred revenue being recognized
from our loyalty program and $0.6 million in Ūth™ skin care
product sales. For the same period in 2013, we deferred $1.2 million in
revenue from our loyalty program, and Ūth skin care products
had not yet been launched. The increases during the three months ended
December 31, 2014 were offset by a $1.2 million unfavorable impact on
net sales due to fluctuations in foreign currency exchange rates.
For the three months ended December 31, 2014, net sales for North
America decreased by $2.5 million, or 11.5%, to $19.2 million as
compared to $21.7 million for the same period in 2013. The decrease in
net sales was primarily due to a 10.8% decrease in the number of active
associates and members in the region.
For the three months ended December 31, 2014, net sales for Europe, the
Middle East and Africa increased by $0.3 million, or 7.1%, to $4.5
million as compared to $4.2 million for the same period in 2013. This
increase is primarily due to a $0.3 million increase in Ūth skin
care product sales and $0.1 million in revenue being deferred from our
loyalty program. For the same period in 2013, $0.3 million in revenue
was deferred from our loyalty program and Ūth skin care
products had not yet been launched. These increases were offset by a
$0.4 million unfavorable impact on net sales due to fluctuations in
foreign currency exchange rates for the region.
Year End Results
Annual net sales for the year ended 2014 were $190.1 million, up 7.1%
from $177.4 million for the year ended 2013. Our net sales increased by
$14.1 million, or 7.9%, in constant dollars which is a non-GAAP
financial measure that excludes the impact of fluctuations in foreign
currency exchange rates.
We reported net income for 2014 of $6.5 million, compared to $3.2
million in 2013. The net income per diluted share was $2.40 in 2014, as
compared to $1.18 in 2013.
For the year ended December 31, 2014, our operations outside of North
America accounted for approximately 57.5% of our consolidated net sales,
whereas in the same period in 2013, our operations outside of North
America accounted for approximately 53.7% of our consolidated sales.
For the year ended December 31, 2014, net sales for Asia/Pacific
increased by $12.1 million, or 15.1%, to $92.4 million as compared to
$80.3 million in 2013.
For the year ended December 31, 2014, net sales for North America
decreased by $1.4 million, or 1.7%, to $80.8 million as compared to
$82.2 million in 2013.
For the year ended December 31, 2014, net sales for Europe, the Middle
East and Africa increased by $2.0 million, or 13.4%, to $16.9 million as
compared to $14.9 million in 2013.
In connection with our loyalty program, we recognize the dollar
equivalent in revenue of loyalty points as the points are applied or
forfeited. During 2014, we recognized $17.0 million revenue and deferred
$21.2 million, resulting in a net deferral of $4.2 million. This is a
reduction of $1.2 million in net deferred revenue as compared to 2013.
The total number of active new and continuing independent associates and
members who purchased our packs or products during the twelve months
ended December 31, 2014 and 2013 was approximately 230,000 and 245,000,
respectively. The number of new independent associates and members for
2014 was 108,000, compared to 116,000 in 2013.
Dr. Robert Sinnott, Mannatech's CEO and Chief Science Officer, said,
“Our independent associates, particularly in the Asia/Pacific region,
have embraced Mannatech’s offer of products and opportunities to expand
their sales base. During 2014, we launched the Ūth skin care
product in our foreign markets that accounted for $11.3 million in
additional sales as compared to 2013. We continue to be optimistic about
our business offering and the revenue growth across the globe.”
Non-GAAP Measures
In addition to results presented in accordance with GAAP, this press
release and related tables include certain non-GAAP financial measures,
including a presentation of constant currency measures. We disclose
operating results that have been adjusted to exclude the impact of
changes due to the translation of foreign currencies into U.S. dollars,
including changes in: Net Sales, Deferred Revenue, Gross Profit, and
Income/(Loss) from Operations. The following tables include a full
reconciliation of actual non-GAAP financial measures to the related GAAP
financial measures.
We believe that these non-GAAP financial measures provide useful
information to investors because they are an indicator of the strength
and performance of ongoing business operations. The constant currency
figures are financial measures used by management to provide investors
an additional perspective on trends. Although we believe the above
non-GAAP financial measures enhance investors' understanding of its
business and performance, these non-GAAP financial measures should not
be considered an exclusive alternative to accompanying GAAP financial
measures.
Conference Call
Mannatech will host a conference call to discuss the quarter’s results
with investors on Wednesday, March 11, 2015 at 9 a.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 97308883.
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 childhood 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, Australia, New Zealand, Austria,
Denmark, Germany, Norway, Sweden, the Netherlands, the United Kingdom,
Japan, Taiwan, Singapore, Estonia, Finland, the Republic of Ireland,
Czech Republic, the Republic of Korea, Mexico, Namibia, Spain and Hong
Kong. 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 “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 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.
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS – (UNAUDITED)
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
|
December 31,
2013
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
27,999
|
|
|
$
|
20,395
|
|
|
Restricted cash
|
|
|
1,511
|
|
|
|
1,519
|
|
|
Accounts receivable, net of allowance
|
|
|
504
|
|
|
|
423
|
|
|
Income tax receivable
|
|
|
4
|
|
|
|
4
|
|
|
Inventories, net
|
|
|
10,591
|
|
|
|
13,988
|
|
|
Prepaid expenses and other current assets
|
|
|
3,069
|
|
|
|
3,061
|
|
|
Deferred commissions
|
|
|
4,544
|
|
|
|
2,706
|
|
|
Deferred tax assets, net
|
|
|
1,141
|
|
|
|
1,578
|
|
|
Total current assets
|
|
|
49,363
|
|
|
|
43,674
|
|
|
Property and equipment, net
|
|
|
2,481
|
|
|
|
3,170
|
|
|
Construction in progress
|
|
|
1,622
|
|
|
|
69
|
|
|
Long-term restricted cash
|
|
|
7,045
|
|
|
|
4,254
|
|
|
Other assets
|
|
|
3,567
|
|
|
|
3,591
|
|
|
Long-term deferred tax assets, net
|
|
|
3,320
|
|
|
|
1,303
|
|
|
Total assets
|
|
$
|
67,398
|
|
|
$
|
56,061
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current portion of capital leases
|
|
$
|
901
|
|
|
$
|
704
|
|
|
Accounts payable
|
|
|
4,252
|
|
|
|
4,996
|
|
|
Accrued expenses
|
|
|
6,356
|
|
|
|
5,796
|
|
|
Commissions and incentives payable
|
|
|
7,908
|
|
|
|
10,210
|
|
|
Taxes payable
|
|
|
2,578
|
|
|
|
1,858
|
|
|
Current deferred tax liability
|
|
|
123
|
|
|
|
114
|
|
|
Deferred revenue
|
|
|
10,890
|
|
|
|
6,380
|
|
|
Total current liabilities
|
|
|
33,008
|
|
|
|
30,058
|
|
|
Capital leases, excluding current portion
|
|
|
852
|
|
|
|
450
|
|
|
Long-term deferred tax liabilities
|
|
|
26
|
|
|
|
9
|
|
|
Other long-term liabilities
|
|
|
2,136
|
|
|
|
2,092
|
|
|
Total liabilities
|
|
|
36,022
|
|
|
|
32,609
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
Common stock
|
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
|
40,672
|
|
|
|
42,592
|
|
|
Retained earnings (deficit)
|
|
|
2,750
|
|
|
|
(3,746
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(109
|
)
|
|
|
(743
|
)
|
|
Treasury stock
|
|
|
(11,937
|
)
|
|
|
(14,651
|
)
|
|
Total shareholders’ equity
|
|
|
31,376
|
|
|
|
23,452
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
67,398
|
|
|
$
|
56,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)
(in thousands, except per share information)
|
|
|
|
|
|
|
|
For the years ended December 31,
|
|
|
|
2014
|
|
2013
|
|
Net sales
|
|
$
|
190,081
|
|
|
$
|
177,423
|
|
|
Cost of sales
|
|
|
38,350
|
|
|
|
36,097
|
|
|
Gross profit
|
|
|
151,731
|
|
|
|
141,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Commissions and incentives
|
|
|
75,240
|
|
|
|
75,633
|
|
|
Selling and administrative expenses
|
|
|
36,193
|
|
|
|
33,758
|
|
|
Depreciation and amortization
|
|
|
1,608
|
|
|
|
2,120
|
|
|
Other operating costs
|
|
|
25,948
|
|
|
|
25,059
|
|
|
Total operating expenses
|
|
|
138,989
|
|
|
|
136,570
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
12,742
|
|
|
|
4,756
|
|
|
Interest income
|
|
|
121
|
|
|
|
22
|
|
|
Other expense, net
|
|
|
(3,042
|
)
|
|
|
(1,969
|
)
|
|
Income before income taxes
|
|
|
9,821
|
|
|
|
2,809
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
|
|
(3,325
|
)
|
|
|
365
|
|
|
Net income
|
|
$
|
6,496
|
|
|
$
|
3,174
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.44
|
|
|
$
|
1.20
|
|
|
Diluted
|
|
$
|
2.40
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2,663
|
|
|
|
2,650
|
|
|
Diluted
|
|
|
2,706
|
|
|
|
2,683
|
|
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with
generally accepted accounting principles in the United States ("GAAP"),
we disclose operating results that have been adjusted to exclude the
impact of changes due to the translation of foreign currencies into U.S.
dollars, including changes in: Net Sales, Deferred Revenue, Gross
Profit, and Income/(Loss) from Operations. We refer to these adjusted
financial measures as constant dollar items, which are Non-GAAP
financial measures. We believe these measures provide investors an
additional perspective on trends. To exclude the impact of changes due
to the translation of foreign currencies into U.S. dollars, we calculate
current year results and prior year results at a constant exchange rate,
which is the prior year’s rate. Currency impact is determined as the
difference between actual growth rates and constant currency growth
rates.
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Reconciliation – Constant $
|
|
|
|
GAAP
Measure:
Total $
|
|
Non-GAAP
Measure:
Constant $
|
|
GAAP
Measure:
Total $
|
|
Dollar
|
|
Percent
|
|
Net Sales
|
|
$ 190.1
|
|
$ 191.5
|
|
$ 177.4
|
|
14.1
|
|
7.9%
|
|
Product
|
|
155.3
|
|
156.7
|
|
143.5
|
|
13.2
|
|
9.2%
|
|
Pack
|
|
27.8
|
|
27.7
|
|
26.2
|
|
1.5
|
|
5.7%
|
|
Other
|
|
7.0
|
|
7.1
|
|
7.7
|
|
(0.6)
|
|
(7.8)%
|
|
Deferred Revenue
|
|
10.9
|
|
11.0
|
|
6.4
|
|
4.6
|
|
71.9%
|
|
Gross Profit
|
|
151.7
|
|
152.5
|
|
141.3
|
|
11.2
|
|
7.9%
|
|
Income/(Loss) from Operations
|
|
12.7
|
|
12.0
|
|
4.8
|
|
7.2
|
|
150.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
2014
|
|
|
|
2013
|
|
New
|
|
108,000
|
|
47.0
|
%
|
|
|
|
116,000
|
|
47.3
|
%
|
|
Continuing
|
|
122,000
|
|
53.0
|
%
|
|
|
|
129,000
|
|
52.7
|
%
|
|
Total
|
|
230,000
|
|
100.0
|
%
|
|
|
|
245,000
|
|
100.0
|
%
|
Source: Mannatech, Incorporated
Mannatech, Incorporated
Donna Giordano, 972-471-6512
Manager,
Executive Office Administration
ir@mannatech.com
www.mannatech.com