Document


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): May 6, 2019
MANNATECH, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)

Texas
000-24657
75-2508900
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
 
 
1410 Lakeside Parkway, Suite 200
 
 
 Flower Mound, Texas 75028
 
 
(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))







Item 2.02 Results of Operations and Financial Condition.
On May 6, 2019, Mannatech, Incorporated issued a press release announcing financial and operating results for the first quarter ended March 31, 2019. 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 Number
Description
Press Release, dated May 6, 2019, titled "Mannatech Reports First Quarter 2019 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.

Date: May 6, 2019
MANNATECH, INCORPORATED
By:
/s/ David Johnson
 
David Johnson
 
Chief Financial Officer



Exhibit



https://cdn.kscope.io/68a9537844b9ee00134f91c5d63a4f14-logoa04.jpg
Mannatech Reports First Quarter 2019 Financial Results

(FLOWER MOUND, Texas) May 6, 2019 - 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 first quarter of 2019.

Quarter End Results

First quarter net sales for 2019 were $38.0 million, a decrease of $3.4 million, or 8.2%, as compared to $41.4 million in the first quarter of 2018. Income from operations increased to $1.1 million for the first quarter 2019, from a loss of $0.9 million in the same period in 2018.

Net income was $0.7 million, or $0.28 per diluted share, for the first quarter 2019, as compared to a net loss of $0.3 million, or $0.10 per diluted share, for the first quarter 2018.

Gross profit as a percentage of sales improved to 80.4% for the three months ended March 31, 2019, as compared to 80.1% for the same period in 2018.

Commission and incentives as a percentage of net sales was 40.0% for the three months ended March 31, 2019, as compared to 41.0% for the same period in the prior year.

For the three months ended March 31, 2019, overall selling and administrative expenses decreased by $0.4 million to $7.6 million, as compared to $8.0 million for the same period in 2018. The decrease in selling and administrative expenses consisted primarily of a $0.7 million decrease in marketing costs partially offset by a $0.3 million increase in payroll related costs.

For the three months ended March 31, 2019, other operating costs decreased by $2.4 million to $6.1 million, as compared to $8.5 million for the same period in 2018 attributed to a $0.8 million decrease in travel and entertainment costs associated with our corporate sponsored events and a $0.2 million decrease in legal and consulting fees. Finally, last year the Company incurred the $1.1 million one-time costs of moving the headquarters during the first quarter.

For lack of participation, the Company will not conduct quarterly conference calls; the Company intends to continue its practice of issuing earnings releases in connection with the filing of its quarterly and annual reports.

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 our packs or products as of March 31, 2019 and 2018 were approximately 203,000 and 210,000, respectively. Recruiting increased 12.0% in the first quarter of 2019 as compared to the first quarter of 2018. The number of new independent associate and preferred customer positions in the company’s network for the first quarter of 2019 was approximately 20,363 as compared to 18,180 in 2018.


Non-GAAP Measures

In addition to results presented in accordance with GAAP, this press release and related tables include certain non-GAAP financial measures, which reconcile net income (loss), as reported to net earnings, as adjusted. This presentation isolates the effects of some items that vary from period to period without any correlation to core operating performance and eliminates certain items that management believes do not reflect the Company’s operations and underlying operational performance. Please see Schedule A: Reconciliation of Non-GAAP Financial Measures (Net Earnings, as Adjusted).






Safe Harbor statement

Forward-looking statements generally can be identified by the use of phrases or terminologies 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.

We caution readers that such forward-looking statements are subject to certain events, risks, uncertainties, and other factors and speak only as of today. We also refer our readers to review our SEC submissions.

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)
 
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
Cash and cash equivalents
$
19,589

 
$
21,845

Restricted cash
1,513

 
1,514

Accounts receivable, net of allowance of $767 and $770 in 2019 and 2018, respectively
143

 
106

Income tax receivable
242

 
291

Inventories, net
12,848

 
12,821

Prepaid expenses and other current assets
3,803

 
3,361

Deferred commissions
2,420

 
2,449

Deferred tax assets, net

 

Total current assets
40,558

 
42,387

Property and equipment, net
5,839

 
5,860

Construction in progress
740

 
904

Long-term restricted cash
7,979

 
7,225

Other assets
8,595

 
3,894

Long-term deferred tax assets, net
1,728

 
1,928

Total assets
$
65,439

 
$
62,198

LIABILITIES AND SHAREHOLDERS’ EQUITY
 

 
 

Current portion of capital leases
$
81

 
$
75

Accounts payable
5,880

 
6,724

Accrued expenses
7,440

 
5,995

Commissions and incentives payable
11,079

 
12,189

Taxes payable
2,538

 
2,655

Current deferred tax liability

 

Current notes payable
975

 
702

Deferred revenue
5,393

 
5,274

Total current liabilities
33,386

 
33,614

Capital leases, excluding current portion
73

 
72

Long-term deferred tax liabilities
3

 
3

Long-term notes payable
756

 
883

Other long-term liabilities
5,575

 
2,302

Total liabilities
39,793

 
36,874

Commitments and contingencies (Note 11)
 
 
 
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 2,395,219 shares outstanding as of March 31, 2019 and 2,742,857 shares issued and 2,381,149 shares outstanding as of December 31, 2018

 

Additional paid-in capital
33,905

 
33,939

Retained earnings (deficit)
(2,397
)
 
(2,782
)
Accumulated other comprehensive income
3,896

 
4,337

Treasury stock, at average cost, 347,638 shares as of March 31, 2019 and 361,708 shares as of December 31, 2018
(9,758
)
 
(10,170
)
Total shareholders’ equity
25,646

 
25,324

Total liabilities and shareholders’ equity
$
65,439

 
$
62,198







MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)

 
For the three months ended March 31,
 
2019
 
2018
Net sales
$
37,973

 
$
41,383

Cost of sales
7,427

 
8,249

Gross profit
30,546

 
33,134

Operating expenses:
 
 
 
Commissions and incentives
15,199

 
16,985

Selling and administrative expenses
7,576

 
7,980

Depreciation and amortization expense
528

 
511

Other operating costs
6,123

 
8,546

Total operating expenses
29,426

 
34,022

Income (loss) from operations
1,120

 
(888
)
Interest income (expense), net
(95
)
 
29

Other income (expense), net
4

 
288

Income (loss) before income taxes
1,029

 
(571
)
Income tax (provision) benefit
(341
)
 
307

Net income (loss)
$
688

 
$
(264
)
Earnings (loss) per common share:
 

 
 

Basic
$
0.29

 
$
(0.10
)
Diluted
$
0.28

 
$
(0.10
)
Weighted-average common shares outstanding:
 

 
 

Basic
2,396

 
2,719

Diluted
2,462

 
2,719







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 in this release adjusted net earnings, a performance measure that the Securities and Exchange Commission defines as a “non-GAAP financial measure.” Management believes that such non-GAAP financial measures, when read in conjunction with the Company’s reported results, in each case calculated in accordance with GAAP, can provide useful supplemental information for investors because they facilitate a period to period comparative assessment of the Company’s operating performance relative to its performance based on reported results under GAAP, while isolating the effects of some items that vary from period to period without any correlation to core operating performance and eliminating certain items that management believes do not reflect the Company’s operations and underlying operational performance.
The following is a reconciliation of net income (loss), presented and reported in accordance with U.S. generally accepted accounting principles, to net earnings, as adjusted for certain items:
 
Three Months Ended
 
 
3/31/2019

 
3/31/2018

 
Net income (loss), as reported
$
688

 
$
(264
)
 
Expenses related to moving the corporate headquarters

 
1,091

 
Net earnings, as adjusted
$
688

 
$
827