Mannatech Reports Second Quarter Results
Higher commission rate impacts earnings; Recruiting and pack sales continue steady improvement
Coppell, TX, August 4, 2009 - Mannatech, Incorporated (NASDAQ – MTEX), a leading developer and provider of proprietary nutritional supplements, weight management products and skin care solutions, today reported a net loss of $5.5 million or $0.21 per diluted share for the second quarter ending June 30, 2009, compared to a net loss of $10.5 million or $0.40 per diluted share for the second quarter of 2008. Operating results were negatively impacted by higher commissions paid due to several bonus types associated with the volume of units sold of the new $499 Premium/All-Star Pack and continuing unfavorable foreign currency exchange.
Second quarter net sales for 2009 were $77.6 million, a decrease of 10.5%, compared to $86.8 million in the second quarter of 2008. North American sales declined 11.6% compared to the second quarter of 2008. International sales decreased 9.1% for the second quarter of 2009 compared to the second quarter of 2008, partially due to the negative impact of a stronger U.S. dollar in the second quarter compared to the second quarter of 2008. The stronger U.S. dollar negatively impacted international sales by $3.8 million. However, sales grew by $6.9 million, a 9.8% increase compared to the first quarter of 2009.
Year-to-date sales through June were $148.3 million, down 16.8% from $178.2 million in the second quarter of 2008. The company reported a net loss for the six-month period of $10.3 million, compared to last year’s net loss of $12.8 million. The loss per share was $0.39, compared to a lost per share of $0.48 for the six-months ended September 2008.
Wayne Badovinus, Mannatech’s president and CEO commented, “A significant increase in Associate enthusiasm created by the launch of our $499 reduced price pack in late January drove sales to almost their highest level in a year. At the same time earnings were lower due to additional short-term costs associated with greater pack sales and expanding our customer base. We believe these short-term costs, although higher than anticipated, should generate long-term volume and profit growth. The result is evidenced by the dramatic increase in our domestic pack sales and number of active associates for the second quarter of 2009.”
Mr. Badovinus continued, “New Associates and Members added in the second quarter of 2009 increased 27.3% compared to the second quarter of 2008, and was 20.5% higher than the first quarter of 2009. Further evidence of our improvement is that domestic pack sales were up 50% in the second quarter of 2009 compared to the second quarter of 2008. We believe we are turning the corner.”
New independent Associates and Members totaled 43,953 in the second quarter of 2009, compared to 36,465 added in the first quarter of 2009, and 34,537 added in the second quarter of 2008. Total independent Associate and Member count based on a 12-month trailing period was 532,000 for the second quarter of 2009 as compared to 554,000 for the second quarter of 2008.
Mannatech will hold a conference call and webcast to discuss this announcement with investors on Wednesday, August 5, 2009 at 9:00 a.m. Central Daylight Time, 10:00 a.m. Eastern Daylight Time. Investors may listen to the call by accessing Mannatech’s website at www.mannatech.com.
Mannatech, Incorporated, is a global wellness solutions provider of innovative, high-quality, proprietary dietary supplements, weight management products and skin care solutions sold through independent Associates and Members located in the United States and the international markets of Canada, Australia, the United Kingdom, Japan, New Zealand, the Republic of Korea, Taiwan, Denmark, Germany, South Africa, and Singapore. For more information please visit www.mannatech.com or www.allaboutmannatech.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”, “believe”, “expect” 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 ability 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.