COPPELL, Texas--(BUSINESS WIRE)--Mar. 28, 2012--
Mannatech,
Incorporated (NASDAQ: MTEX),
a leading developer and provider of nutritional supplements and skin
care products based on Real
Food Technology® solutions, today reported a
net loss of $7.0 million, or $2.63 per diluted share, for the fourth
quarter ending December 31, 2011, compared to net loss of $2.7 million,
or $1.04 per diluted share, for the fourth quarter of 2010. Included in
the fourth quarter results was a $2.6 million settlement in the
previously disclosed lawsuit with a supplier related to contractual
purchase commitments.
Fourth quarter net sales for 2011 were $47.9 million, a decrease of
12.8% compared to $54.9 million in the fourth quarter of 2010. Net sales
for United States and Canada declined 14.6% to $23.5 million compared to
$27.5 million in the fourth quarter of 2010. International net sales of
$24.4 million decreased 10.9% compared to $27.4 million in the fourth
quarter of 2010.
Annual net sales for 2011 were $200.7 million, down 12.0% from $228.1
million for the full year 2010. The company reported a net loss for the
full year of $20.7 million, compared to the full year net loss of $10.6
million in 2010. The loss per share, as adjusted for a 1-for-10 reverse
stock split, was of $7.80 for the full year 2011 compared to the loss
per share of $4.01 for the full year 2010.
Mark Nicholls, Chief Financial Officer, said, “Our losses during 2011
were primarily non-cash in nature as the cash from operations declined
$2.9 million in comparison to the net loss of $20.7 million. The largest
non-cash item is depreciation associated with the 2007 launch of our
Enterprise Resource Planning system. It is anticipated future
depreciation expenses will decline during 2012 to historical levels.”
Total independent Associates and Members based on a 12-month trailing
period was approximately 372,000 as of December 31, 2011 compared to
403,000 as of December 31, 2010. New independent Associates and Members
for the full year 2011 were 77,000 compared to 89,000 in 2010.
Mr. Nicholls adds, “During 2011, we continued addressing the challenges
from an overall reduction in recruiting. In June 2011, we announced a
restructuring of our U.S. operations and elimination of 98 work force
positions. Additionally, as opportunities were identified, other
operating costs were reduced internationally. As a result, we were able
to increase cash by $736,000 in the last 6 months of 2011 despite the
reduction in revenues.”
Dr. Robert Sinnott, CEO & Chief Science Officer, commented, “We launched
five new countries, including Mexico, during 2011. We launched sales and
marketing initiatives designed to support our Associates in growing
their businesses at our annual MannaQuest event in Seattle. We continue
to support the accelerating growth of our business among ethnic markets,
particularly the Chinese and Korean ethnic markets in Canada and the
United States. We also introduced our Omega-3 with Vitamin D3
supplement to our customers. We believe these activities, along with the
collaborative research being conducted on our products, continue to add
value to the company.”
Conference Call
Mannatech will hold a conference call and webcast to discuss this
announcement with investors on Thursday, March 29, 2012 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 www.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
888-286-8010 (International: 617-801-6888); the Conference ID to access
the call is 24558486.
Individuals interested in Mannatech’s products or in exploring its
business opportunity can learn more at mannatech.com.
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, South Africa, Namibia, Australia, New Zealand, Austria,
Denmark, Germany, Norway, Sweden, the Netherlands, the United Kingdom,
Japan, Taiwan, Singapore, Estonia, Finland, the Republic of Ireland,
Czech Republic, the Republic of Korea and Mexico. 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 “anticipate,” “believe,” “will” 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.
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CONSOLIDATED BALANCE SHEETS
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(in thousands, except share and per share information)
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December 31,
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|
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2011
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2010
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ASSETS
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Cash and cash equivalents
|
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$
|
18,057
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|
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$
|
21,584
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Restricted cash
|
|
|
1,263
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|
|
|
|
1,265
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Accounts receivable, net of allowance of $22 and $21 in 2011 and
2010, respectively
|
|
|
304
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|
|
|
|
416
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Income tax receivable
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|
888
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|
|
917
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Inventories, net
|
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|
17,786
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|
|
|
|
24,070
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Prepaid expenses and other current assets
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|
2,497
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|
|
|
|
4,356
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Deferred tax assets
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|
936
|
|
|
|
|
2,607
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Total current assets
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41,731
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|
|
|
55,215
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Property and equipment, net
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9,566
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|
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|
18,449
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Construction in progress
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—
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|
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524
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Long-term restricted cash
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3,386
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|
|
|
3,532
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Other assets
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|
2,815
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|
|
|
3,054
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Long-term deferred tax assets
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|
772
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|
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|
|
649
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Total assets
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$
|
58,270
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|
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$
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81,423
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current portion of capital leases
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$
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852
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$
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1,328
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Accounts payable
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|
4,825
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|
|
|
|
5,534
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|
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Accrued expenses
|
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|
10,514
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|
|
|
|
10,318
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|
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Commissions and incentives payable
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|
8,567
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|
|
|
|
9,166
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|
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Taxes payable
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|
|
3,364
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|
|
|
|
3,721
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|
|
Current deferred tax liability
|
|
|
185
|
|
|
|
|
243
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Deferred revenue
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1,569
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|
|
|
|
1,930
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Total current liabilities
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29,876
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|
|
|
|
32,240
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|
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Capital leases, excluding current portion
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1,358
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|
|
|
|
1,204
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|
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Long-term deferred tax liabilities
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1
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|
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|
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1,903
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Other long-term liabilities
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5,382
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|
|
|
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4,996
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Total liabilities
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|
36,617
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|
|
|
|
40,343
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|
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|
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Commitments and contingencies
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Shareholders’ equity:
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Preferred stock, $0.01 par value, 1,000,000 shares authorized, no
shares issued or outstanding
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—
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—
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Common stock, $0.0001 par value, 99,000,000 shares authorized,
2,769,756 shares issued and 2,648,518 shares outstanding as of
December 31, 2011 and 2,769,756 shares issued and 2,649,046 shares
outstanding as of December 31, 2010
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—
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—
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Additional paid-in capital
|
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|
42,408
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|
|
|
|
42,052
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Retained earnings (deficit)
|
|
|
(5,532
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)
|
|
|
|
15,127
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|
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Accumulated other comprehensive loss
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|
|
(427
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)
|
|
|
|
(1,308
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)
|
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Less treasury stock, at cost, 121,237 shares in 2011 and 120,709
shares in 2010
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(14,796
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)
|
|
|
|
(14,791
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)
|
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Total shareholders’ equity
|
|
|
21,653
|
|
|
|
|
41,080
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|
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Total liabilities and shareholders’ equity
|
|
$
|
58,270
|
|
|
|
$
|
81,423
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|
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CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)
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(in thousands, except per share information)
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Three months ended
December 31,
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Twelve months ended
December 31,
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2011
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2010
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2011
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2010
|
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Net sales
|
|
$
|
47,907
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|
|
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$
|
54,951
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|
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|
|
$
|
200,689
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|
|
|
$
|
228,088
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|
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Cost of sales
|
|
|
8,257
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|
|
|
|
8,114
|
|
|
|
|
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30,421
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|
|
|
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32,754
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Commissions and incentives
|
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|
20,781
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|
|
|
|
22,702
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|
|
|
|
|
87,425
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|
|
|
|
97,319
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|
|
|
|
|
29,038
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|
|
|
|
30,816
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|
|
|
|
|
117,846
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|
|
|
|
130,073
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|
|
Gross profit
|
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|
18,869
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|
|
|
|
24,135
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|
|
|
|
82,843
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|
|
|
|
98,015
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|
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Operating expenses:
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Selling and administrative
|
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12,495
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15,078
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|
|
|
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|
55,697
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|
|
|
|
62,657
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Depreciation and amortization
|
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|
2,565
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|
|
|
|
2,826
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|
|
|
|
|
10,697
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|
|
|
|
11,517
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|
|
Other operating
|
|
|
9,899
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|
|
|
|
9,030
|
|
|
|
|
|
33,338
|
|
|
|
|
35,322
|
|
|
Total operating expenses
|
|
|
24,959
|
|
|
|
|
26,934
|
|
|
|
|
|
99,732
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|
|
|
|
109,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(6,090
|
)
|
|
|
|
(2,799
|
)
|
|
|
|
|
(16,889
|
)
|
|
|
|
(11,481
|
)
|
|
Interest income
|
|
|
120
|
|
|
|
|
172
|
|
|
|
|
|
117
|
|
|
|
|
173
|
|
|
Other income (expense), net
|
|
|
(12
|
)
|
|
|
|
443
|
|
|
|
|
|
(1,106
|
)
|
|
|
|
268
|
|
|
Loss before income taxes
|
|
|
(5,982
|
)
|
|
|
|
(2,184
|
)
|
|
|
|
|
(17,878
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)
|
|
|
|
(11,040
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)
|
|
(Provision) benefit for income taxes
|
|
|
(986
|
)
|
|
|
|
(558
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)
|
|
|
|
|
(2,781
|
)
|
|
|
|
424
|
|
|
Net loss
|
|
$
|
(6,968
|
)
|
|
|
$
|
(2,742
|
)
|
|
|
|
$
|
(20,659
|
)
|
|
|
$
|
(10,616
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(2.63
|
)
|
|
|
$
|
(1.04
|
)
|
|
|
|
$
|
(7.80
|
)
|
|
|
$
|
(4.01
|
)
|
|
Diluted
|
|
$
|
(2.63
|
)
|
|
|
$
|
(1.04
|
)
|
|
|
|
$
|
(7.80
|
)
|
|
|
$
|
(4.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2,649
|
|
|
|
|
2,649
|
|
|
|
|
|
2,649
|
|
|
|
|
2,649
|
|
|
Diluted
|
|
|
2,649
|
|
|
|
|
2,649
|
|
|
|
|
|
2,649
|
|
|
|
|
2,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The approximate number of new and continuing independent associates and
members who purchased our packs or products during the twelve months
ended December 31 was as follows:
|
|
|
2011
|
|
|
|
2010
|
|
New
|
|
77,000
|
|
|
21
|
%
|
|
|
|
89,000
|
|
|
22
|
%
|
|
Continuing
|
|
295,000
|
|
|
79
|
%
|
|
|
|
314,000
|
|
|
78
|
%
|
|
Total
|
|
372,000
|
|
|
100
|
%
|
|
|
|
403,000
|
|
|
100
|
%
|
Source: Mannatech, Incorporated
Mannatech, Incorporated
Kim Welch, 972-471-6512
Senior
Reporting Manager
ir@mannatech.com
www.mannatech.com