mtex-20220513
FALSE000105635800010563582022-05-132022-05-13


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 13, 2022
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,Texas75028
(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 13, 2022, Mannatech, Incorporated issued a press release announcing financial and operating results for the first quarter ended March 31, 2022. 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 13, 2022, titled "Mannatech Reports First Quarter 2022 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 13, 2022
MANNATECH, INCORPORATED
By:/s/ David Johnson
David Johnson
Chief Financial Officer


Document


https://cdn.kscope.io/80ab300721141820e582400fb1956010-logoa04.jpg
Mannatech Reports First Quarter End 2022 Financial Results

(FLOWER MOUND, Texas) May 13, 2022 - 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 2022.

First Quarter End Results

First quarter net sales for 2022 were $32.4 million, a decrease of $5.9 million, or 15.5%, as compared to $38.3 million in the first quarter of 2021. Our net sales declined 11.5% on a constant dollar basis (see Non-GAAP Measures, below) and foreign exchange decreased GAAP net sales by $1.5 million, mostly due to the decline of the Korean Won and Japanese Yen. During the quarter, supply chain constraints impacted our sales. As a result, we had to postpone planned promotions as we were sourcing and shipping product. We deferred revenue of orders shipped but not received by customers, in particular in our Asia Pacific market. In Hong Kong, we have deferred $0.9 million revenue for orders shipped but not received by customers. The number of product fulfilled orders decreased by 6.0% to 189,700 for the three months ended March 31, 2022, as compared to 201,729 during the same period in 2021.

First quarter operating income for 2022 was less than $0.1 million as compared to $2.8 million for the first quarter of 2021.

Net income was $0.1 million, or $0.06 per diluted share, for the first quarter of 2022, as compared to net income of $2.2 million, or $1.04 per diluted share, for the first quarter of 2021.

For the three months ended March 31, 2022, overall selling and administrative expenses decreased by $0.2 million to $6.9 million, as compared to $7.1 million for the same period in 2021. The decrease in selling and administrative expenses consisted of a $0.1 million decrease in marketing costs and a $0.1 million decrease in contract labor costs.

For the three months ended March 31, 2022, other operating costs decreased by $0.2 million to $4.9 million, as compared to $5.1 million for the same period in 2021. The decrease in operating costs was primarily due to a $0.2 million decrease in legal and consulting fees.

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, 2022 and 2021 were approximately 157,000 and 187,000, respectively. Recruitment of new independent associates and preferred customers decreased by 5.1% to 18,542 in the first quarter of 2022 as compared to 19,538 in the first quarter of 2021.


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, the current conflict between Russia and Ukraine, which could adversely affect our business in certain regions, the impact of inflation, disruptions in the supply chain, 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, 2022 (unaudited)December 31, 2021
Cash and cash equivalents$23,359 $24,185 
Restricted cash944 944 
Accounts receivable, net of allowance of $991 and $987 in 2022 and 2021, respectively
91 90 
Income tax receivable385 342 
Inventories, net12,591 12,020 
Prepaid expenses and other current assets3,798 2,888 
Deferred commissions3,103 2,369 
Total current assets44,271 42,838 
Property and equipment, net2,591 2,882 
Construction in progress1,507 1,357 
Long-term restricted cash503 503 
Other assets9,528 9,220 
Deferred tax assets, net2,740 2,825 
Total assets$61,140 $59,625 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current portion of finance leases$60 $68 
Accounts payable5,122 3,969 
Accrued expenses8,407 9,224 
Commissions and incentives payable9,629 9,611 
Taxes payable1,756 2,154 
Current notes payable608 205 
Deferred revenue6,617 4,867 
Total current liabilities32,199 30,098 
Finance leases, excluding current portion69 66 
Deferred tax liabilities— — 
Long-term notes payable— — 
Other long-term liabilities5,142 5,049 
Total liabilities37,410 35,213 
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 1,949,716 shares outstanding as of March 31, 2022 and 2,742,857 shares issued and 1,940,687 shares outstanding as of December 31, 2021— — 
Additional paid-in capital33,359 33,277 
Retained earnings7,452 7,708 
Accumulated other comprehensive income1,669 2,342 
Treasury stock, at average cost, 793,141 shares as of March 31, 2022 and 802,170 shares as of December 31, 2021(18,750)(18,915)
Total shareholders’ equity23,730 24,412 
Total liabilities and shareholders’ equity$61,140 $59,625 




MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
 Three Months Ended
March 31,
 20222021
Net sales$32,384 $38,319 
Cost of sales7,091 7,222 
Gross profit25,293 31,097 
Operating expenses:  
Commissions and incentives13,108 15,598 
Selling and administrative expenses6,909 7,111 
Depreciation and amortization expense332 510 
Other operating costs4,909 5,089 
Total operating expenses25,258 28,308 
Income from operations35 2,789 
Interest income, net15 22 
Other income (expense), net85 (282)
Income before income taxes135 2,529 
Income tax (provision) (1)(335)
Net income$134 $2,194 
Earnings per common share:  
Basic$0.07 $1.06 
Diluted$0.06 $1.04 
Weighted-average common shares outstanding:  
Basic1,947 2,071 
Diluted2,074 2,116 




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 2022 constant dollar net sales, gross profit and income from operations to our GAAP net sales, gross profit and income from operations.

Three-month period ended (in millions, except percentages)
March 31, 2022March 31, 2021
Constant $ Change
 GAAP
Measure:
Total $
Non-GAAP Measure:
Constant $
GAAP
Measure:
Total $
DollarPercent
Net Sales$32.4 $33.9 $38.3 $(4.4)(11.5)%
Product30.8 32.2 35.9 (3.7)(10.3)%
Pack and associate fees1.3 1.4 2.2 (0.8)(36.4)%
Other0.3 0.3 0.2 0.1 50.0 %
Gross profit25.3 26.4 31.1 (4.7)(15.1)%
Income from operations— 0.2 2.8 (2.6)(92.9)%