COPPELL, Texas--(BUSINESS WIRE)--May 12, 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 first quarter 2015.
First quarter net sales for 2015 were $44.4 million, an increase of 3.3%
as compared to $43.0 million in the first quarter of 2014. Mannatech’s
net sales increased 7.4% in constant dollars, which is a non-GAAP
financial measure that excludes the impact of fluctuations in foreign
currency exchange rates.
Net income was $1.1 million, or $0.40 per diluted share, for the first
quarter 2015, as compared to net income of $0.2 million, or $0.08 per
diluted share, for the first quarter 2014.
Dr. Robert Sinnott, Mannatech’s CEO and Chief Science Officer, said, “We
are pleased that our global teams continue making forward progress on
multiple fronts. Our mandates for this year remain largely the same; to
improve our global sales, keep expenses in line, and increase
operational efficiency to improve profitability.”
For the three months ended March 31, 2015, the company’s operations
outside of North America accounted for approximately 59.2% of its
consolidated net sales, whereas in the same period in 2014, its
operations outside of North America accounted for approximately 52.8% of
its consolidated net sales.
For the three months ended March 31, 2015, Asia/Pacific net sales
increased by $3.7 million, or 19.5%, to $22.7 million, as compared to
$19.0 million for the same period in 2014. The increase in net sales is
due primarily to an increase in average order size and $0.6 million in ŪthTM
skin care product sales. For the same period in 2014, Mannatech deferred
$0.8 million in revenue from its loyalty program and Ūth skin
care products had not yet been launched. Fluctuations in Asia/ Pacific
foreign currency exchange rates had a $1.3 million unfavorable impact on
net sales during the three months ended March 31, 2015.
For the three months ended March 31, 2015, EMEA net sales decreased by
$0.1 million, or 2.7%, to $3.6 million, as compared to $3.7 million for
the same period in 2014. Active independent associates and members
increased 16% as compared to the same period in the prior year.
Fluctuations in EMEA foreign currency exchange rates had a $0.5 million
unfavorable impact on net sales during the three months ended March 31,
2015. Ūth skin care product sales increased net sales by $0.1
million during the three months ended March 31, 2015. For the same
period in 2014, Mannatech deferred $0.2 million in revenue from the
loyalty program and Ūth skin care product sales had not been
launched.
North American net sales decreased by $2.2 million, or 10.8%, to $18.1
million, as compared to $20.3 million for the same period in 2014 due to
a 15.7% decline in active independent associates and members. For the
same period in 2014, $1.2 million in revenue was deferred from the
loyalty program.
Global recruiting decreased 0.4% in the first quarter 2015 as compared
to the first quarter of 2014. The number of new independent associates
and members for the first quarter of 2015 was approximately 25,500, as
compared to 25,600 in 2014. The total number of independent associates
and members based on a 12-month trailing period was approximately
230,000 as of March 31, 2015, as compared to 246,000 as of March 31,
2014.
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. Disclosed
operating results 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 from Operations. The following tables include a full
reconciliation of actual non-GAAP financial measures to the related GAAP
financial measures.
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 the above non-GAAP financial measures
enhance investors’ understanding of Mannatech’s 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, May 13, 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 39707396.
Individuals interested in Mannatech’s products or in exploring its
business opportunity can learn more at Mannatech.com.
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
ASSETS
|
|
|
(unaudited)
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
28,399
|
|
|
|
$
|
27,999
|
|
|
Restricted cash
|
|
|
|
1,512
|
|
|
|
|
1,511
|
|
|
Accounts receivable, net of allowance of $215 and $213 in 2015 and
2014, respectively
|
|
|
|
378
|
|
|
|
|
504
|
|
|
Income tax receivable
|
|
|
|
10
|
|
|
|
|
4
|
|
|
Inventories, net
|
|
|
|
13,484
|
|
|
|
|
10,591
|
|
|
Prepaid expenses and other current assets
|
|
|
|
2,679
|
|
|
|
|
3,069
|
|
|
Deferred commissions
|
|
|
|
4,476
|
|
|
|
|
4,544
|
|
|
Deferred tax assets, net
|
|
|
|
926
|
|
|
|
|
1,141
|
|
|
Total current assets
|
|
|
|
51,864
|
|
|
|
|
49,363
|
|
|
Property and equipment, net
|
|
|
|
3,375
|
|
|
|
|
2,481
|
|
|
Construction in progress
|
|
|
|
1,299
|
|
|
|
|
1,622
|
|
|
Long-term restricted cash
|
|
|
|
6,984
|
|
|
|
|
7,045
|
|
|
Other assets
|
|
|
|
4,081
|
|
|
|
|
3,567
|
|
|
Long-term deferred tax assets, net
|
|
|
|
3,553
|
|
|
|
|
3,320
|
|
|
Total assets
|
|
|
$
|
71,156
|
|
|
|
$
|
67,398
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current portion of capital leases
|
|
|
$
|
1,257
|
|
|
|
$
|
901
|
|
|
Accounts payable
|
|
|
|
7,375
|
|
|
|
|
4,252
|
|
|
Accrued expenses
|
|
|
|
6,001
|
|
|
|
|
6,356
|
|
|
Commissions and incentives payable
|
|
|
|
6,540
|
|
|
|
|
7,908
|
|
|
Taxes payable
|
|
|
|
2,074
|
|
|
|
|
2,578
|
|
|
Current deferred tax liability
|
|
|
|
147
|
|
|
|
|
123
|
|
|
Deferred revenue
|
|
|
|
11,387
|
|
|
|
|
10,890
|
|
|
Total current liabilities
|
|
|
|
34,781
|
|
|
|
|
33,008
|
|
|
Capital leases, excluding current portion
|
|
|
|
1,343
|
|
|
|
|
852
|
|
|
Long-term deferred tax liabilities
|
|
|
|
1
|
|
|
|
|
26
|
|
|
Other long-term liabilities
|
|
|
|
2,137
|
|
|
|
|
2,136
|
|
|
Total liabilities
|
|
|
|
38,262
|
|
|
|
|
36,022
|
|
|
|
|
|
|
|
|
|
|
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,
2,773,972 shares issued and 2,679,411 shares outstanding as of March
31, 2015 and 2,773,972 shares issued and 2,676,077 shares
outstanding as of December 31, 2014
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
|
|
40,442
|
|
|
|
|
40,672
|
|
|
Accumulated earnings
|
|
|
|
3,849
|
|
|
|
|
2,750
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
133
|
|
|
|
|
(109
|
)
|
|
Less treasury stock, at average cost, 94,561 and 97,895 shares in
2015 and 2014, respectively
|
|
|
|
(11,530
|
)
|
|
|
|
(11,937
|
)
|
|
Total shareholders’ equity
|
|
|
|
32,894
|
|
|
|
|
31,376
|
|
|
Total liabilities and shareholders’ equity
|
|
|
$
|
71,156
|
|
|
|
$
|
67,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)
|
|
(in thousands, except per share information)
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
Net sales
|
|
|
$
|
44,370
|
|
|
|
$
|
42,963
|
|
|
Cost of sales
|
|
|
|
8,553
|
|
|
|
|
9,398
|
|
|
Gross profit
|
|
|
|
35,817
|
|
|
|
|
33,565
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Commissions and incentives
|
|
|
|
17,542
|
|
|
|
|
16,968
|
|
|
Selling and administrative expenses
|
|
|
|
8,813
|
|
|
|
|
7,876
|
|
|
Depreciation and amortization
|
|
|
|
396
|
|
|
|
|
386
|
|
|
Other operating costs
|
|
|
|
6,555
|
|
|
|
|
6,956
|
|
|
Total operating expenses
|
|
|
|
33,306
|
|
|
|
|
32,186
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
2,511
|
|
|
|
|
1,379
|
|
|
Interest income
|
|
|
|
30
|
|
|
|
|
1
|
|
|
Other expense, net
|
|
|
|
(932
|
)
|
|
|
|
(336
|
)
|
|
Income before income taxes
|
|
|
|
1,609
|
|
|
|
|
1,044
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
510
|
|
|
|
|
816
|
|
|
Net income
|
|
|
$
|
1,099
|
|
|
|
$
|
228
|
|
|
|
|
|
|
|
|
|
|
Income per common share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.41
|
|
|
|
$
|
0.09
|
|
|
Diluted
|
|
|
$
|
0.40
|
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
2,677
|
|
|
|
|
2,654
|
|
|
Diluted
|
|
|
|
2,730
|
|
|
|
|
2,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States (“GAAP”),
the disclosed operating results 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 from Operations. These adjusted financial measures as
constant dollar items, which are non-GAAP financial measures.
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, the current year results and prior year
results are calculated 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
|
|
March 31,
2014
|
|
|
|
Reconciliation –
Constant $
|
|
|
|
|
GAAP
Measure:
Total $
|
|
|
Non-GAAP
Measure:
Constant $
|
|
|
|
GAAP
Measure:
Total $
|
|
|
|
Dollar
|
|
|
Percent
|
|
Net Sales
|
|
|
$
|
44.4
|
|
|
$
|
46.2
|
|
|
|
$
|
43.0
|
|
|
|
$
|
3.2
|
|
|
|
7.4
|
%
|
|
Product
|
|
|
|
34.2
|
|
|
|
35.6
|
|
|
|
|
34.5
|
|
|
|
|
1.1
|
|
|
|
3.2
|
%
|
|
Pack
|
|
|
|
8.9
|
|
|
|
9.2
|
|
|
|
|
6.7
|
|
|
|
|
2.5
|
|
|
|
37.3
|
%
|
|
Other
|
|
|
|
1.3
|
|
|
|
1.4
|
|
|
|
|
1.8
|
|
|
|
|
(0.4
|
)
|
|
|
(22.2
|
)%
|
|
Deferred Revenue
|
|
|
|
11.3
|
|
|
|
11.9
|
|
|
|
|
9.7
|
|
|
|
|
2.2
|
|
|
|
22.7
|
%
|
|
Gross Profit
|
|
|
|
35.8
|
|
|
|
37.1
|
|
|
|
|
33.6
|
|
|
|
|
3.5
|
|
|
|
10.4
|
%
|
|
Income/(Loss) from Operations
|
|
|
|
2.5
|
|
|
|
2.6
|
|
|
|
|
1.4
|
|
|
|
|
1.2
|
|
|
|
85.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The approximate number of new and continuing independent associates and
members who purchased our packs or products during the twelve months
ended March 31 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
New
|
|
|
108,000
|
|
|
47.0
|
%
|
|
|
|
118,000
|
|
|
48.0
|
%
|
|
Continuing
|
|
|
122,000
|
|
|
53.0
|
%
|
|
|
|
128,000
|
|
|
52.0
|
%
|
|
Total
|
|
|
230,000
|
|
|
100.0
|
%
|
|
|
|
246,000
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 independent
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.
Source: Mannatech, Incorporated
Mannatech, Incorporated
Donna Giordano, 972-471-6512
Manager,
Executive Office Administration
ir@mannatech.com
www.mannatech.com