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 11, 2021
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, 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))

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 May 11, 2021, Mannatech, Incorporated issued a press release announcing financial and operating results for the third quarter ended March 31, 2021. 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 May 11, 2021, titled "Mannatech Reports First Quarter 2021 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 11, 2021
MANNATECH, INCORPORATED
By:/s/ David Johnson
David Johnson
Chief Financial Officer


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Mannatech Reports First Quarter End 2021 Financial Results

(FLOWER MOUND, Texas) May 11, 2021 - 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 2021.

First Quarter End Results

First quarter net sales for 2021 were $38.3 million, an increase of $1.7 million, or 4.7%, as compared to $36.6 million in the first quarter of 2020. Income from operations increased to $2.8 million for the first quarter of 2021, from $2.0 million in the same period in 2020.

Net income was $2.2 million, or $1.04 per diluted share, for the first quarter of 2021, as compared to net income of $2.8 million, or $1.15 per diluted share, for the first quarter of 2020.

Gross profit as a percentage of sales increased to 81.2% for the three months ended March 31, 2021, as compared to 80.9% for the same period in 2020.

Commission and incentives as a percentage of net sales remained constant at 40.7% for each of the three months ended March 31, 2021 and 2020.

For the three months ended March 31, 2021, overall selling and administrative expenses increased by $0.2 million to $7.1 million, as compared to $6.9 million for the same period in 2020. The increase in selling and administrative expenses was due to a $0.3 million increase in payroll costs, a $0.1 million increase in marketing costs, which was partially offset by a $0.1 million decrease in stock-based compensation and a $0.1 million decrease in contract labor costs.

For the three months ended March 31, 2021, other operating costs decreased by $0.2 million, or 4.4%, to $5.1 million, as compared to $5.3 million for the same period in 2020. The decrease in operating costs was primarily due to a $0.3 million decrease in travel and entertainment and a $0.1 million decrease in office expenses, which was partially offset by a $0.2 million increase in consulting fees.

For the three months ended March 31, 2021, provision for taxes was $0.3 million, or an effective rate of 13.3%. For the three months ended March 31, 2020, taxes were a $0.9 million benefit. The effective tax rate for the three months ended March 31, 2020 was different from the federal statutory rate due primarily to the $1.2 million benefit recorded in connection with the carryback of U.S. net operating losses as allowed by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted March 27, 2020.

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 March 31, 2021 and 2020 were approximately 187,000 and 166,000, respectively. Recruitment increased 4.6% in the first quarter of 2021 as compared to the first quarter of 2020. The number of new independent associate and preferred customer positions in the company’s network for the first quarter of 2021 was approximately 19,538 as compared to 18,687 in 2020.


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, 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)
ASSETSMarch 31, 2021 (unaudited)December 31, 2020
Cash and cash equivalents$23,576 $22,207 
Restricted cash944 944 
Accounts receivable, net of allowance of $872 and $817 in 2021 and 2020, respectively225 186 
Income tax receivable536 1,008 
Inventories, net13,625 12,827 
Prepaid expenses and other current assets3,645 2,962 
Deferred commissions2,220 2,343 
Total current assets44,771 42,477 
Property and equipment, net3,949 4,494 
Construction in progress976 864 
Long-term restricted cash3,126 4,346 
Other assets10,866 11,977 
Long-term deferred tax assets, net1,053 1,178 
Total assets$64,741 $65,336 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current portion of finance leases$89 $76 
Accounts payable4,836 4,797 
Accrued expenses7,369 8,691 
Commissions and incentives payable11,804 10,998 
Taxes payable1,251 1,400 
Current notes payable755 553 
Deferred revenue5,788 5,472 
Total current liabilities31,892 31,987 
Finance leases, excluding current portion111 129 
Deferred tax liabilities
Long-term notes payable— — 
Other long-term liabilities6,392 7,245 
Total liabilities38,398 39,364 
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 2,063,280 shares outstanding as of March 31, 2021 and 2,742,857 shares issued and 2,071,081 shares outstanding as of December 31, 2020— — 
Additional paid-in capital33,757 33,795 
Retained earnings4,074 2,213 
Accumulated other comprehensive income3,794 5,150 
Treasury stock, at average cost, 679,577 shares as of March 31, 2021 and 671,776 shares as of December 31, 2020(15,282)(15,186)
Total shareholders’ equity26,343 25,972 
Total liabilities and shareholders’ equity$64,741 $65,336 




MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
 Three Months Ended
March 31,
 20212020
Net sales$38,319 $36,605 
Cost of sales7,222 7,008 
Gross profit31,097 29,597 
Operating expenses:  
Commissions and incentives15,598 14,889 
Selling and administrative expenses7,111 6,855 
Depreciation and amortization expense510 520 
Other operating costs5,089 5,322 
Total operating expenses28,308 27,586 
Income from operations2,789 2,011 
Interest income, net22 50 
Other expense, net(282)(208)
Income before income taxes2,529 1,853 
Income tax (provision) benefit(335)934 
Net income$2,194 $2,787 
Earnings per common share:  
Basic$1.06 $1.17 
Diluted$1.04 $1.15 
Weighted-average common shares outstanding:  
Basic2,071 2,391 
Diluted2,116 2,415 




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 first quarter 2021 constant dollar net sales, gross profit and income from operations to GAAP net sales, gross profit and income from operations.
 March 31, 2021March 31, 2020
Constant $ Change
 GAAP
Measure:
Total $
Non-GAAP Measure:
Constant $
GAAP
Measure:
Total $
DollarPercent
Net Sales$38.3 $36.8 $36.6 $0.2 0.5 %
Product35.9 34.6 35.9 (1.3)(3.6)%
Pack and associate fees2.2 2.1 0.5 1.6 320.0 %
Other0.2 0.2 0.2 — — %
Gross profit31.1 29.9 29.6 0.3 1.0 %
Income from operations2.8 2.4 2.0 0.4 20.0 %