UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 7, 2012
MANNATECH, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
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Texas
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000-24657
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75-2508900
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(State or other Jurisdiction of Incorporation or Organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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600 S. Royal Lane, Suite 200
Coppell, Texas 75019
(Address of Principal Executive Offices, including Zip Code)
Registrant’s Telephone Number, including Area Code: (972) 471-7400
_________________________________________________
(Former name or former address, if change since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
On November 7, 2012, Mannatech, Incorporated issued a press release announcing financial and operating results for the third quarter ended September 30, 2012. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number
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Exhibit
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99.1*
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Press release, dated November 7, 2012, entitled “Mannatech Reports Third Quarter 2012 Financial Results.”
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*Filed herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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MANNATECH, INCORPORATED
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Dated: November 7, 2012
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By:
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/s/ S. Mark Nicholls
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S. Mark Nicholls
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Number
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Exhibit
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99.1*
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Press release, dated November 7, 2012, entitled “Mannatech Reports Third Quarter 2012 Financial Results.”
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*Filed herewith.
Exhibit 99.1
Mannatech Reports Third Quarter 2012 Financial Results
(COPPELL, Texas) November 7, 2012 — Mannatech, Incorporated (NASDAQ: MTEX), a leading developer and provider of nutritional supplements and skin care products based on Real Food Technology® solutions, today reported net income of $2.2 million, or $0.83 per diluted share, for the third quarter ending September 30, 2012, compared to a net loss of $3.7 million, or $1.38 per diluted share, for the third quarter of 2011.
In achieving net income of $2.2 million for the third quarter of 2012, non-cash items impacting profitability included a reduction in a previously recognized deferred tax asset valuation allowance of approximately $1.0 million, a release of reserves related to transaction taxes of $0.8 million due to the expiration of statutes of limitations, and income from foreign currency exchange rate fluctuations of $0.5 million. Third quarter operating profitability, net income adjusted for the non-cash items listed above, was near even as we move closer to our goal of profitability. We expect our continuation of targeted expense reductions to have a positive impact on profitability and cash flow.
Net sales for the third quarter of 2012 were $43.0 million, a decrease of 14.8%, compared to $50.5 million in the third quarter of 2011. Net sales for the United States and Canada declined 16.3% to $20.5 million, compared to $24.5 million in the third quarter of 2011. International net sales of $22.5 million decreased 13.5%, compared to $26.0 million in the third quarter of 2011.
Recruiting increased 38.4% as compared to the third quarter of 2011. New independent associates and members for the third quarter of 2012 were 27,610 compared to 19,950 in 2011. Total active independent associates and members were approximately 233,000 as of the 12-month trailing period ended September 30, 2012, compared to 239,000 as of the 12-month trailing period ended September 30, 2011.
Dr. Robert Sinnott, CEO and Chief Science Officer, commented, “Our global sales force continues to gain strength as evidenced by the increased levels of recruitment. I traveled to several national conventions in North America, Japan, Taiwan and Australia where I had the opportunity to share with our new and existing associate leaders the exciting new product, NutriVerus™ powder and how this product positions Mannatech to introduce many more customers to the world of high-quality, natural nutrition.”
Conference Call
Mannatech will hold a conference call and webcast to discuss this announcement with investors on Thursday, November 8, 2012 at 9:00 a.m. Central Standard Time/10:00 a.m. Eastern Standard Time. Investors may listen to the call by accessing Mannatech’s website at 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 37606108.
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, the Republic of Namibia, 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 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,” “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.
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MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – (UNAUDITED)
(in thousands, except share and per share amounts)
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September 30,
2012
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December 31,
2011
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||||||
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ASSETS
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(unaudited)
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||||||
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Cash and cash equivalents
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$
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12,781
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$
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18,057
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Restricted cash
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1,513
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1,263
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Accounts receivable, net of allowance of $30 and $22 in 2012 and 2011, respectively
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310
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304
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Income tax receivable
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891
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888
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Inventories, net
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18,088
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17,786
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Prepaid expenses and other current assets
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2,149
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2,497
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Deferred tax assets
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994
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936
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Total current assets
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36,726
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41,731
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|||||
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Property and equipment, net
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5,449
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9,566
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Construction in progress
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4
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—
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|||||
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Long-term restricted cash
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3,614
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3,386
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Other assets
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3,270
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2,815
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Long-term deferred tax assets
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810
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772
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Total assets
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$
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49,873
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$
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58,270
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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|||||||
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Current portion of capital leases
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$
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636
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$
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852
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Accounts payable
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4,899
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4,825
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Accrued expenses
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7,755
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10,514
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Commissions and incentives payable
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6,422
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8,567
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Taxes payable
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2,330
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3,364
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Current deferred tax liability
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203
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185
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Deferred revenue
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2,187
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1,569
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Total current liabilities
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24,432
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29,876
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Capital leases, excluding current portion
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1,006
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1,358
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Long-term deferred tax liabilities
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2
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1
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Other long-term liabilities
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4,800
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5,382
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Total liabilities
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30,240
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36,617
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Commitments and contingencies
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|||||||
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Shareholders’ equity:
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Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding
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—
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—
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Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,768,972 shares issued and 2,647,735 shares outstanding as of September 30, 2012 and 2,769,756 shares issued and 2,648,518 shares outstanding as of December 31, 2011
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—
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—
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Additional paid-in capital
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42,572
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42,408
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Accumulated deficit
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(7,174
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)
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(5,532
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)
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Accumulated other comprehensive loss
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(969
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)
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(427
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)
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Less treasury stock, at cost, 121,237 shares in 2012 and 2011
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(14,796
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)
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(14,796
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)
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Total shareholders’ equity
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19,633
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21,653
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Total liabilities and shareholders’ equity
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$
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49,873
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$
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58,270
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MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)
(in thousands, except per share information)
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Three months ended
September 30,
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Nine months ended
September 30,
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2012
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2011
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2012
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2011
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Net sales
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$
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43,049
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$
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50,520
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$
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131,162
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$
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152,782
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Cost of sales
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6,755
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7,407
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20,038
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22,164
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Commissions and incentives
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18,658
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22,041
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56,280
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66,644
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25,413
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29,448
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76,318
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88,808
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Gross profit
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17,636
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21,072
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54,844
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63,974
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Operating expenses:
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Selling and administrative
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10,516
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12,373
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33,793
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43,202
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Depreciation and amortization
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703
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2,644
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4,082
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8,132
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Other operating costs
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5,328
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7,627
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19,342
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23,439
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Total operating expenses
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16,547
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22,644
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57,217
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74,773
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Income (loss) from operations
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1,089
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(1,572
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)
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(2,373
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)
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(10,799
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)
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||||||
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Interest income (expense)
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6
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(4
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)
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(26
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)
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(3
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)
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Other income (expense), net
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455
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(1,557
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)
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542
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(1,094
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)
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Income (loss) before income taxes
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1,550
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(3,133
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)
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(1,857
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)
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(11,896
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)
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Provision for income taxes
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663
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(530
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)
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215
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(1,795
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)
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|||||||
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Net income (loss)
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$
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2,213
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$
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(3,663
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)
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$
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(1,642
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)
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$
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(13,691
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)
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Net income (loss) per share:
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|||||||||||||
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Basic
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$
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.84
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$
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(1.38
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)
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$
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(.62
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)
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$
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(5.17
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)
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Diluted
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$
|
.83
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$
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(1.38
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)
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$
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(.62
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)
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$
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(5.17
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)
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||
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Weighted-average common shares outstanding:
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|||||||||||||
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Basic
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2,648
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2,649
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2,648
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2,649
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|||||||||
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Diluted
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2,681
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2,649
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2,648
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2,649
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|||||||||
The approximate number of new and continuing associates who purchased our packs or products during the twelve months ended September 30, 2012 and 2011, plus member accounts eligible to purchase products were as follows:
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2012
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2011
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||||||||
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New
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95,000
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40.8
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%
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82,000
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34.3
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%
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|||
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Continuing
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138,000
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59.2
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%
|
157,000
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65.7
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%
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|||
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Total
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233,000
|
100.0
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%
|
239,000
|
100.0
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%
|
|||