Mannatech Reports First Quarter 2018 Financial Results
First Quarter Results
First quarter net sales for 2018 were
Loss from operations was
For the three months ended March 31, 2018, Mannatech’s operations
outside of the
First quarter 2018 Asia/Pacific net sales increased by
First quarter 2018 net sales for
For the three months ended March 31, 2018, net sales in the
Commission expenses for the three months ended March 31, 2018 decreased
by 1.8%, or
Incentive costs for the three months ended March 31, 2018 increased by
34.5%, or
The approximate number of new and continuing active independent associates and preferred customers who purchased our packs or products or paid associate fees during the twelve months ended March 31, 2018 and 2017 were approximately 210,000 and 220,000, respectively. Recruitment of new independent associates and preferred customers decreased 20.5% during the three months ended March 31, 2018 as compared to the same period in 2017. The number of new independent associate and preferred customer positions held by individuals in our network for the three months ended March 31, 2018 was approximately 18,200, as compared to 22,900 for the same period in 2017.
For the three months ended March 31, 2018, selling and administrative
expenses decreased by
Other operating costs, which include professional fees, travel and
entertainment, bad debt, credit card processing fees, and other
miscellaneous operating expenses, increased by
As of March 31, 2018, our cash and cash equivalents increased by 0.5%,
or
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.
Conference Call
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 2898645.
Individuals interested in Mannatech’s products or in exploring its business opportunity can learn more at Mannatech.com.
| MANNATECH, INCORPORATED AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
|
(in thousands, except share and per share amounts) |
||||||||||
| ASSETS | March 31, 2018 (unaudited) |
December 31, |
||||||||
| Cash and cash equivalents | $ | 37,936 | $ | 37,682 | ||||||
| Restricted cash | 1,515 | 1,514 | ||||||||
| Accounts receivable, net of allowance of $572 and $582 in 2018 and 2017, respectively | 400 | 273 | ||||||||
| Income tax receivable | — | 907 | ||||||||
| Inventories, net | 9,048 | 9,385 | ||||||||
| Prepaid expenses and other current assets | 3,831 | 2,607 | ||||||||
| Deferred commissions | 3,912 | 3,880 | ||||||||
| Total current assets | 56,642 | 56,248 | ||||||||
| Property and equipment, net | 3,199 | 3,537 | ||||||||
| Construction in progress | 2,263 | 777 | ||||||||
| Long-term restricted cash | 7,598 | 7,565 | ||||||||
| Other assets | 3,944 | 3,876 | ||||||||
| Long-term deferred tax assets, net | 5,362 | 4,239 | ||||||||
| Total assets | $ | 79,008 | $ | 76,242 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current portion of capital leases | $ | 152 | $ | 228 | ||||||
| Accounts payable | 5,453 | 6,008 | ||||||||
| Accrued expenses | 5,724 | 5,771 | ||||||||
| Commissions and incentives payable | 10,690 | 9,658 | ||||||||
| Taxes payable | 3,086 | 2,404 | ||||||||
| Current notes payable | 916 | 815 | ||||||||
| Deferred revenue | 8,605 | 8,561 | ||||||||
| Total current liabilities | 34,626 | 33,445 | ||||||||
| Capital leases, excluding current portion | 127 | 144 | ||||||||
| Long-term deferred tax liabilities | 1,153 | 1,147 | ||||||||
| Other long-term liabilities | 2,850 | 1,265 | ||||||||
| Total liabilities | 38,756 | 36,001 | ||||||||
| 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 2,719,271 shares outstanding as of March 31, 2018 and 2,742,857 shares issued and 2,702,940 shares outstanding as of December 31, 2017 | — | — | ||||||||
| Additional paid-in capital | 33,216 | 34,928 | ||||||||
| Retained earnings | 3,586 | 4,190 | ||||||||
| Accumulated other comprehensive income | 6,318 | 5,984 | ||||||||
| Treasury stock, at average cost, 23,586 shares as of March 31, 2018 and 39,917 shares as of December 31, 2017, respectively | (2,868 | ) | (4,861 | ) | ||||||
| Total shareholders’ equity | 40,252 | 40,241 | ||||||||
| Total liabilities and shareholders’ equity | $ | 79,008 | $ | 76,242 | ||||||
| MANNATECH, INCORPORATED AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED) | ||||||||||
|
(in thousands, except per share information) |
||||||||||
| Three Months Ended March 31, |
||||||||||
| 2018 | 2017 | |||||||||
| Net sales | $ | 41,383 | $ | 40,641 | ||||||
| Cost of sales | 8,249 | 8,762 | ||||||||
| Gross profit | 33,134 | 31,879 | ||||||||
| Operating expenses: | ||||||||||
| Commissions and incentives | 16,985 | 17,081 | ||||||||
| Selling and administrative expenses | 7,980 | 8,654 | ||||||||
| Depreciation and amortization expense | 511 | 502 | ||||||||
| Other operating costs | 8,546 | 7,676 | ||||||||
| Total operating expenses | 34,022 | 33,913 | ||||||||
| Loss from operations | (888 | ) | (2,034 | ) | ||||||
| Interest income | 29 | 29 | ||||||||
| Other income, net | 288 | 41 | ||||||||
| Loss before income taxes | (571 | ) | (1,964 | ) | ||||||
| Income tax benefit | 307 | 717 | ||||||||
| Net loss | $ | (264 | ) | $ | (1,247 | ) | ||||
| Loss per common share: | ||||||||||
| Basic | $ | (0.10 | ) | $ | (0.46 | ) | ||||
| Diluted | $ | (0.10 | ) | $ | (0.46 | ) | ||||
| Weighted-average common shares outstanding: | ||||||||||
| Basic | 2,719 | 2,701 | ||||||||
| Diluted | 2,719 | 2,701 | ||||||||
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with
generally accepted accounting principles in
| Three-month period ended (in millions, except percentages) |
March 31, 2018 | March 31, 2017 | Constant $ Change | |||||||||||||||||||||||
| GAAP Measure: Total $ |
Non-GAAP Measure: Constant $ |
GAAP Measure: Total $ |
Dollar | Percent | ||||||||||||||||||||||
| Net sales | $ | 41.4 | $ | 39.6 | $ | 40.6 | $ | (1.0 | ) | (2.5 | )% | |||||||||||||||
| Product | 41.0 | 39.2 | 35.0 | 4.2 | 12.0 | % | ||||||||||||||||||||
| Pack sales and associate fees(a) | 0.5 | 0.5 | 5.7 | (5.2 | ) | (91.2 | )% | |||||||||||||||||||
| Other | (0.1 | ) | (0.1 | ) | (0.1 | ) | — | — | % | |||||||||||||||||
| Gross profit | 33.1 | 31.7 | 31.9 | (0.2 | ) | (0.6 | )% | |||||||||||||||||||
| Loss from operations | (0.9 | ) | (1.2 | ) | (2.0 | ) | 0.8 | (40.0 | )% | |||||||||||||||||
(a)Coincident with the introduction of the 2017 Associate
Compensation Plan, which was implemented on
Schedule A: Reconciliation of Non-GAAP Financial Measures (Net Earnings, as Adjusted)
(Unaudited and unreviewed), (Table provides Dollars in thousands)
In addition to its reported results and guidance calculated in
accordance with GAAP, the Company has included adjusted net earnings, a
performance measure that the
The following is a reconciliation of net loss, presented and reported in accordance with U.S. generally accepted accounting principles, to net earnings, as adjusted for certain items:
| Three Months Ended | ||||||||||
| 3/31/2018 | 3/31/2017 | |||||||||
| Net loss, as reported | $ | (264 | ) | $ | (1,247 | ) | ||||
| Expenses related to moving the corporate headquarters | 1,091 | — | ||||||||
| Net earnings, as adjusted | $ | 827 | $ | (1,247 | ) | |||||
About
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 “may,” “will,” “should,” “could,” “would,”
“expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,”
“approximates,” “predicts,” “projects,” "hopes," “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. This release should be read in conjunction with all of its
filings with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20180508006467/en/
Source:
Mannatech, Incorporated
Donna Giordano, 972-471-6512
Manager,
Executive Office Administration
ir@mannatech.com
www.mannatech.com