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Mannatech Reports Second Quarter Results
Q2 Sales Improve vs. Q1

COPPELL, Texas, Aug 03, 2011 (BUSINESS WIRE) --

Mannatech, Incorporated(NASDAQ:MTEX) today reported for the quarter ended June 30, 2011 net sales of $51.4 million, and a net loss of $5.2 million, or $0.20 per diluted share compared to the 2010 loss of $0.14 per share. Quarterly sales declined $6.2 million or 10.8%, compared to the second quarter of 2010. The net loss increased by $1.4 million for the quarter largely due to lower results from Australasia, the reserve taken for severances due to job eliminations, and costs associated with Mexico which launched operations in late January 2011.

Sales in the second quarter increased by $0.5 million compared to the first quarter of 2011. This increase marked the first period to show improvement in several years. The overall increase compared to the first quarter of 2011 reflected higher international results which increased 5.3%, while the domestic sales decline was limited to 3.0% compared to the first quarter. The international gain was due to sales and recruiting in the Republic of Korea along with favorable currency translations compared to the first quarter.

Sales were $102.3 million for the first six months of 2011, below 2010 by $16.0 million, or 13.5%. The net loss of $10.0 million exceeded last year by $3.4 million, and the net loss of $0.38 per diluted share was greater than the prior year by $0.13 per diluted share.

New independent Associates and Members totaled 20,048 in the second quarter of 2011, compared to 22,775 in the second quarter of 2010, a decrease of 12.0%. Total independent Associate and Member count based on a 12-month trailing period was approximately 385,000 as of June 30, 2011 as compared to 450,000 as of June 30, 2010.

Conference Call

Mannatech will hold a conference call and webcast to discuss this announcement with investors on Thursday, August 4, 2011 at 9:00 a.m. Central Daylight Time, 10:00 a.m. Eastern Daylight Time. Investors may listen to the call by accessing 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 83385265.

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 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, Australia, Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, Japan, Mexico, the Netherlands, New Zealand, Norway, the Republic of Ireland, the Republic of Korea, Singapore, South Africa, Sweden, Taiwan, and the United Kingdom. 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 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.

Net Sales in Dollars and as a Percentage of Consolidated Net Sales - (Unaudited)

Three months ended June 30,(1) Six months ended June 30,(1)
Country 2011 2010 2011 2010
(in millions, except percentages)
United States $ 21.3 41.4 % $ 26.0 45.1 % $ 43.7 42.7 % $ 53.8 45.5 %
Japan 7.7 15.0 % 8.2 14.2 % 15.2 14.9 % 16.9 14.3 %
Republic of Korea 6.2 12.1 % 5.7 9.9 % 11.4 11.1 % 11.1 9.4 %
Australia 4.5 8.8 % 4.8 8.3 % 9.0 8.8 % 10.1 8.5 %
Canada 4.3 8.3 % 5.0 8.7 % 8.2 8.0 % 9.4 7.9 %
South Africa 2.2 4.3 % 2.9 5.0 % 4.3 4.2 % 6.1 5.2 %
Taiwan 1.0 1.9 % 1.4 2.4 % 2.3 2.2 % 3.6 3.0 %
Singapore 0.8 1.6 % 0.4 0.7 % 1.4 1.4 % 1.0 0.8 %
New Zealand 0.7 1.3 % 0.9 1.7 % 1.2 1.2 % 1.8 1.5 %
Mexico(2) 0.6 1.2 % -- -- 1.3 1.3 % -- --
Germany 0.5 1.0 % 0.6 1.0 % 1.0 1.0 % 1.2 1.0 %
United Kingdom 0.5 0.9 % 0.6 1.0 % 0.8 0.8 % 1.2 1.0 %
Norway 0.4 0.8 % 0.4 0.7 % 0.9 0.9 % 0.7 0.6 %
The Netherlands 0.3 0.6 % 0.2 0.4 % 0.6 0.6 % 0.3 0.3 %
Austria 0.2 0.4 % 0.3 0.5 % 0.5 0.4 % 0.6 0.5 %
Denmark 0.1 0.2 % 0.1 0.2 % 0.2 0.2 % 0.3 0.3 %
Sweden 0.1 0.2 % 0.1 0.2 % 0.3 0.3 % 0.2 0.2 %
Totals $ 51.4 100 % $ 57.6 100 % $ 102.3 100 % $ 118.3 100 %

(1) The Company began operations in the Czech Republic, Estonia, Finland, and the Republic of Ireland in June 2011. Their combined consolidated sales for the three and six months ended June 30, 2011 were less than $0.1 million.

(2) The Company began operations in Mexico in January 2011.

The number of new and continuing independent associates and members who purchased our packs or products during the twelve months ended June 30, 2011 and 2010 were as follows:

2011 2010
New 84,000 21.9 % 108,000 24.0 %
Continuing 301,000 78.1 % 342,000 76.0 %
Total 385,000 100 % 450,000 100 %

MANNATECH, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED)

(in thousands, except per share information)

Three months ended
June 30,
Six months ended
June 30,
2011 2010 2011 2010
Net sales $ 51,362 $ 57,606 $ 102,262 $ 118,271
Cost of sales 7,543 8,091 14,757 16,716
Commissions and incentives 22,896 24,509 44,603 51,508
30,439 32,600 59,360 68,224
Gross profit 20,923 25,006 42,902 50,047
Operating expenses:
Selling and administrative 14,811 15,297 30,829 31,768
Depreciation and amortization 2,687 3,002 5,488 5,919
Other operating costs 7,746 8,836 15,812 17,381
Total operating expenses 25,244 27,135 52,129 55,068
Loss from operations (4,321 ) (2,129 ) (9,227 ) (5,021 )
Interest income (expense) 21 10 1 (19 )
Other income (expense), net 196 (715 ) 463 (575 )
Loss before income taxes (4,104 ) (2,834 ) (8,763 ) (5,615 )
(Provision) benefit for income taxes (1,146 ) (981 ) (1,265 ) (981 )
Net loss $ (5,250 ) $ (3,815 ) $ (10,028 ) $ (6,596 )
Net loss per share:
Basic $ (0.20 ) $ (0.14 ) $ (0.38 ) $ (0.25 )
Diluted $ (0.20 ) $ (0.14 ) $ (0.38 ) $ (0.25 )
Weighted-average common shares outstanding:
Basic 26,490 26,490 26,490 26,486
Diluted 26,490 26,490 26,490 26,486

MANNATECH, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

June 30,
2011

December 31,
2010

ASSETS (unaudited)
Cash and cash equivalents $ 17,321 $ 21,584
Restricted cash 1,274 1,265
Accounts receivable, net of allowance of $20 and $21 in 2011 and 2010, respectively 129 416
Income tax receivable 893 917
Inventories, net 18,778 24,070
Prepaid expenses and other current assets 5,022 4,356
Deferred tax assets 2,993 2,607
Total current assets 46,410 55,215
Property and equipment, net 14,196 18,449
Construction in progress 46 524
Long-term restricted cash 3,621 3,532
Other assets 2,960 3,054
Long-term deferred tax assets 250 649
Total assets $ 67,483 $ 81,423
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of capital leases $ 1,196 $ 1,328
Accounts payable 5,037 5,534
Accrued expenses 9,516 10,318
Commissions and incentives payable 7,961 9,166
Taxes payable 2,005 3,721
Current deferred tax liability 159 243
Deferred revenue 1,922 1,930
Total current liabilities 27,796 32,240
Capital leases, excluding current portion 980 1,204
Long-term deferred tax liabilities 1,550 1,903
Other long-term liabilities 5,862 4,996
Total liabilities 36,188 40,343
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, 27,697,560 shares issued and 26,490,466 shares outstanding as of June 30, 2011 and December 31, 2010 3 3
Additional paid-in capital 42,251 42,049
Retained earnings 5,099 15,127
Accumulated other comprehensive loss (1,267 ) (1,308 )
Less treasury stock, at cost, 1,207,094 shares in 2011 and 2010 (14,791 ) (14,791 )
Total shareholders' equity 31,295 41,080
Total liabilities and shareholders' equity $ 67,483 $ 81,423

SOURCE: Mannatech, Incorporated

Mannatech, Incorporated
Tatiana Morosyuk, Executive Director, Financial Reporting, 972-471-6512
ir@mannatech.com
www.mannatech.com