mtex-20230814
FALSE000105635800010563582023-08-142023-08-14


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): August 14, 2023
MANNATECH, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Texas000-2465775-2508900
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
1410 Lakeside Parkway, Suite 200
 Flower Mound,Texas75028
(Address of Principal Executive Offices, including Zip Code)
Registrant’s Telephone Number, including Area Code:(972)471-7400
(Former name or former address, if changed 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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock,par value $0.0001 per shareMTEXThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




Item 2.02 Results of Operations and Financial Condition.
On August 14, 2023, Mannatech, Incorporated issued a press release announcing financial and operating results for the second quarter ended June 30, 2023. 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.    
Exhibit NumberDescription
Press Release, dated August 14, 2023, titled "Mannatech Reports Second Quarter 2023 Financial Results."
*Furnished herewith.
SIGNATURES

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.

August 14, 2023
MANNATECH, INCORPORATED
By:/s/ David Johnson
David Johnson
Chief Financial Officer


Document


https://cdn.kscope.io/5febc42ccad2af8befd8a7019fd5eb68-logoa04.jpg
Mannatech Reports Second Quarter End 2023 Financial Results

(FLOWER MOUND, Texas) August 14, 2023 - Mannatech, Incorporated (NASDAQ: MTEX), a global health and wellness company committed to transforming lives to make a better world, today announced financial results for its second quarter of 2023.

Second Quarter End Results

Second quarter net sales for 2023 were $32.6 million, a decrease of $2.4 million, or 6.8%, as compared to $35.0 million in the second quarter of 2022. Our net sales decreased 4.0% on a constant dollar basis (see Non-GAAP Measures, below) as foreign exchange decreased GAAP net sales by $1.0 million, mostly due to the decline of the Korean Won and Japanese Yen.

Second quarter operating loss for 2023 was $1.0 million as compared to operating income of $0.9 million for the second quarter of 2022.

Net loss was $1.1 million, or $0.59 per diluted share, for the second quarter of 2023, as compared to net income of $0.7 million, or $0.34 per diluted share, for the second quarter of 2022.

For the three months ended June 30, 2023, overall selling and administrative expenses increased by $0.3 million to $7.2 million, as compared to $6.9 million for the same period in 2022. The increase in selling and administrative expenses consisted of a $0.1 million increase in payroll costs (as $0.5 million severance was partially offset by other lower payroll costs), a $0.1 million increase in marketing costs and a $0.1 million increase in warehouse costs.

For the three months ended June 30, 2023, other operating costs increased by $0.6 million to $5.4 million, as compared to $4.9 million for the same period in 2022. The increase in operating costs was primarily due to a $0.4 million increase in consulting fees, a $0.4 million increase in travel and entertainment, which was partially offset by a $0.2 million decrease in office expenses. Consulting fees include $0.4 million in consulting relating to Trulu, a new venture to serve as our innovation hub.

The approximate number of new and continuing independent associate and preferred customer positions held by individuals in Mannatech’s network and associated with purchases of products as of June 30, 2023 and 2022 were approximately 142,000 and 152,000, respectively. Recruitment of new independent associates and preferred customers decreased by 2.59% to 19,309 in the second quarter of 2023 as compared to 19,823 in the second quarter of 2022.

Year-to-date Second Quarter Results

For the six months ended June 30, 2023, net sales were $66.7 million, a decrease of $0.7 million, or 1.0%, as compared to $67.4 million for the same period in 2022. Our net sales increased 2.8% on a constant dollar basis (see Non-GAAP Measures, below) as foreign exchange decreased GAAP net sales by $2.6 million mostly due to the decline of the Korean Won and Japanese Yen.

Operating loss for the six months ended June 30, 2023 was $0.2 million as compared to operating income of $0.9 million for the same period in 2022.

Net loss was $0.5 million, or $0.27 per diluted share, for the six months ended June 30, 2023, as compared to net income of $0.8 million, or $0.40 per diluted share, for the same period in 2022.

We will not pay a quarterly dividend this quarter, which will preserve approximately $0.4 million of cash.





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 dollar 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, Gross Profit, and Income from Operations. 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 non-GAAP financial measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an exclusive alternative to accompanying GAAP financial measures. Please see the accompanying table entitled "Non-GAAP Financial Measures" for a reconciliation of these non-GAAP financial measures.

Safe Harbor statement

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 “may,” “will,” “should,” “hope,” “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “approximates,” “predicts,” “projects,” “potential,” and “continues” 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, the impact of COVID-19 on Mannatech’s business, the availability and effectiveness of vaccines on a widespread basis, the impact of any mutations of the COVID-19 virus, the current conflict between Russia and Ukraine, which could adversely affect our business in certain regions, the impact of inflation, disruptions in the supply chain, Mannatech's inability to attract and retain associates and preferred customers, 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 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.

Individuals interested in Mannatech's products or in exploring its business opportunity can learn more at Mannatech.com


Contact Information:
Donna Giordano
Manager, Executive Office Administration
972-471-6512
ir@mannatech.com
www.mannatech.com




MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
ASSETSJune 30, 2023 (unaudited)December 31, 2022
Cash and cash equivalents$9,374 $13,777 
Restricted cash938 944 
Accounts receivable, net of allowance of $1,109 and $973 in 2023 and 2022, respectively
645 218 
Income tax receivable422 423 
Inventories, net15,838 14,726 
Prepaid expenses and other current assets2,183 2,389 
Deferred commissions1,852 2,476 
Total current assets31,252 34,953 
Property and equipment, net4,689 3,759 
Long-term restricted cash460 476 
Other assets7,834 8,439 
Deferred tax assets, net1,164 1,501 
Total assets$45,399 $49,128 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current portion of finance leases$274 $61 
Accounts payable5,825 4,361 
Accrued expenses6,930 7,510 
Commissions and incentives payable8,734 9,256 
Taxes payable1,738 3,281 
Current notes payable411 263 
Deferred revenue4,330 5,106 
Total current liabilities28,242 29,838 
Finance leases, excluding current portion1,115 88 
Other long-term liabilities4,400 5,026 
Total liabilities33,757 34,952 
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, 2,742,857 shares issued and 1,866,212 shares outstanding as of June 30, 2023 and 2,742,857 shares issued and 1,858,800 shares outstanding as of December 31, 2022
— — 
Additional paid-in capital33,294 33,377 
Retained earnings437 1,686 
Accumulated other comprehensive (loss) income(1,658)(208)
Treasury stock, at average cost, 876,645 shares as of June 30, 2023 and 884,057 shares as of December 31, 2022
(20,431)(20,679)
Total shareholders’ equity11,642 14,176 
Total liabilities and shareholders’ equity$45,399 $49,128 




MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2023202220232022
Net sales$32,594 $34,976 $66,708 $67,360 
Cost of sales7,004 7,920 14,417 15,011 
Gross profit25,590 27,056 52,291 52,349 
Operating expenses:  
Commissions and incentives13,465 14,137 27,022 27,245 
Selling and administrative expenses7,257 6,914 13,673 13,823 
Depreciation and amortization expense387 301 774 633 
Other operating costs5,435 4,851 11,063 9,760 
Total operating expenses26,544 26,203 52,532 51,461 
(Loss) income from operations(954)853 (241)888 
Interest (expense) income, net(10)23 14 38 
Other income (expense), net150 (84)483 
(Loss) income before income taxes(814)792 256 927 
Income tax (provision) (291)(98)(757)(99)
Net (loss) income$(1,105)$694 $(501)$828 
(Loss) income per common share:  
Basic$(0.59)$0.36 $(0.27)$0.43 
Diluted$(0.59)$0.34 $(0.27)$0.40 
Weighted-average common shares outstanding:  
Basic1,870 1,942 1,871 1,944 
Diluted1,870 2,031 1,871 2,052 




Non-GAAP Financial Measures (Sales, Gross Profit and Income from Operations in Constant Dollars)

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, Gross Profit, and Income 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.
The table below reconciles second quarter 2023 and year-to-date constant dollar net sales, gross profit and income from operations to our GAAP net sales, gross profit and income from operations.

Three-month period endedJune 30, 2023June 30, 2022
Constant $ Change
(in millions, except percentages)
GAAP
Measure:
Total $
Non-GAAP Measure:
Constant $
GAAP
Measure:
Total $
DollarPercent
Net sales$32.6 $33.6 $35.0 $(1.4)(4.0)%
Product31.0 32.0 33.0 (1.0)(3.0)%
Pack sales and associate fees1.4 1.4 1.8 (0.4)(22.2)%
Other0.2 0.2 0.2 — — %
Gross profit25.6 26.4 27.1 (0.7)(2.6)%
(Loss) income from operations(1.0)(0.8)0.9 (1.7)(188.9)%


Six-month period endedJune 30, 2023June 30, 2022Constant $ Change
(in millions, except percentages)
GAAP
Measure:
Total $
Non-GAAP
Measure:
Constant $
GAAP
Measure:
Total $
DollarPercent
Net sales$66.7 $69.3 $67.4 $1.9 2.8 %
Product62.9 65.3 63.8 1.5 2.4 %
Pack sales and associate fees3.5 3.7 3.1 0.6 19.4 %
Other0.3 0.3 0.5 (0.2)(40.0)%
Gross profit52.3 54.3 52.3 2.0 3.8 %
(Loss) income from operations(0.2)0.3 0.9 (0.6)(66.7)%