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 15, 2003
MANNATECH, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
| Texas |
000-24657 |
75-2508900 | ||
| (State or other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
600 S. Royal Lane, Suite 200
Coppell, Texas 75019
(Address of Principal Executive Offices, including Zip Code)
Registrant’s Telephone Number, including Area Code: (972) 471-7400
Item 9. Regulation FD Disclosure
The information set forth under this Item 9. “Regulation FD Disclosure” is intended to be furnished under Item 12 “Results of Operations and Financial Condition” in accordance with SEC Release No. 33-8216.
On May 15, 2003, Mannatech, Incorporated, a Texas corporation, issued a press release announcing its financial results for the first quarter ended March 31, 2003. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
SIGNATURE
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.
| MANNATECH, INCORPORATED | ||||||||
| Dated: May 15, 2003 |
/s/ Stephen D. Fenstermacher | |||||||
| Name: Title: |
Stephen D. Fenstermacher Chief Financial Officer | |||||||
EXHIBIT INDEX
| Exhibit Number |
Exhibit | ||
| 99.1 |
* |
Press release dated May 15, 2003 entitled “Mannatech Reports First Quarter Financial Results.” |
*Filed herewith.
Exhibit 99.1
Mannatech Reports First Quarter Financial Results
Coppell, TX, May 15, 2003 – Mannatech, Incorporated (NASDAQ – MTEX) today reported its net sales for the first quarter ended March 31, 2003 reached $40.5 million and net income totaled $1.4 million, or $0.06 earnings per share. Comparable 2002 quarterly net sales were $32.9 million and net income was $0.6 million, or $0.02 earnings per share.
Net sales for the first quarter of 2003 increased $7.6 million, or 23.1% as compared to the same period in 2002. In the first quarter of 2003, 28,000 more associates and members joined Mannatech compared to 19,000 more associates and members for the first quarter of 2002, which was a gain of 47.4%. Net sales increased for the three months ended March 31, 2003 in North America, Australia, the United Kingdom, Japan and New Zealand, with a slight decline in Canada, compared to the same period in 2002.
Net income for the three months ended March 31, 2003 increased 133.3% to $1.4 million as compared to the same period in 2002. This increase was achieved despite recognition of approximately $1.0 million of costs for Mannafest, Mannatech’s annual sales event, which was held in March of 2003 as compared to April of 2002.
On April 15, 2003, Samuel L. Caster was unanimously appointed by our Board of Directors to serve as our Chief Executive Officer (“CEO”). Mr. Caster, Chairman and CEO stated, “Our exceptional first quarter results are directly attributable to the focus and drive of our associates as they spread the knowledge of our products around the world. Our international markets, under new management, have added immensely to our level of success. The addition of Steve Lemme, our new Senior Vice President of Sales, should further provide greater support to our independent associates while also helping Mannatech achieve its objectives of continued growth and profitability.”
In the second quarter of 2003, Mannatech intends to take a charge of approximately $1.3 million for severance costs related to the resignation of its former CEO.
For nearly a decade, Mannatech has considered itself a wellness solution provider that develops innovative, high-quality, proprietary nutritional supplements, weight management products and topical products that are sold through a global network-marketing system throughout the United States and the international markets of Canada, Australia, the United Kingdom, Japan and New Zealand.
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 statements are subject to certain events, risks and uncertainties that may be outside of Mannatech’s control. Actual results and developments could materially differ from those expressed in or implied by such statements due to a number of factors. In some cases, forward-looking statements may be identified by terminology such as “may,” “should,” “believes,” or “approximates,” or the negative of such terms and other comparable terminology. Although Mannatech believes that the expectations reflected in these forward-looking statements are reasonable, it cautions its readers to consider the risk factors and any other cautionary statements in this release, as well as those set forth in Mannatech’s filings with the Securities and Exchange Commission. All of the forward-looking statements contained herein speak only as of the date of this press release.
Contact: Steve Fenstermacher, CFO (972) 471-6512 or IR@mannatech.com
Exhibit 99.1
MANNATECH, INCORPORATED
CONSOLIDATED BALANCE SHEETS—UNAUDITED
(in thousands, except share amounts)
| December 31, 2002 |
March 31, 2003 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ |
17,693 |
|
$ |
17,366 |
| ||
| Restricted cash |
|
— |
|
|
2,123 |
| ||
| Accounts receivable |
|
632 |
|
|
405 |
| ||
| Income tax receivable |
|
307 |
|
|
307 |
| ||
| Current portion of notes receivable from shareholders, net of allowance of $31 in 2002 and 2003 |
|
143 |
|
|
143 |
| ||
| Inventories |
|
5,515 |
|
|
5,902 |
| ||
| Prepaid expenses and other current assets |
|
759 |
|
|
1,134 |
| ||
| Deferred tax assets |
|
1,013 |
|
|
1,015 |
| ||
| Total current assets |
|
26,062 |
|
|
28,395 |
| ||
| Property and equipment, net |
|
7,467 |
|
|
7,002 |
| ||
| Notes receivable from shareholders, excluding current portion |
|
247 |
|
|
198 |
| ||
| Other assets |
|
1,040 |
|
|
1,047 |
| ||
| Total assets |
$ |
34,816 |
|
$ |
36,642 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current portion of capital leases and notes payable |
$ |
136 |
|
$ |
40 |
| ||
| Accounts payable |
|
1,846 |
|
|
1,273 |
| ||
| Accrued expenses |
|
13,739 |
|
|
14,817 |
| ||
| Current portion of accrued severance related to former executives |
|
810 |
|
|
565 |
| ||
| Total current liabilities |
|
16,531 |
|
|
16,695 |
| ||
| Capital leases and notes payable, excluding current portion |
|
8 |
|
|
7 |
| ||
| Accrued severance, related to former executives, excluding current portion |
|
150 |
|
|
75 |
| ||
| Deferred tax liabilities |
|
77 |
|
|
79 |
| ||
| Other long-term liabilities |
|
— |
|
|
253 |
| ||
| Total liabilities |
|
16,766 |
|
|
17,109 |
| ||
| Commitments and contingencies |
|
— |
|
|
— |
| ||
| Shareholders’ equity: |
||||||||
| Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding |
|
— |
|
|
— |
| ||
| Common stock, $0.0001 par value, 99,000,000 shares authorized, 25,162,541 shares issued and 25,134,840 outstanding in 2002 and 2003, respectively |
|
3 |
|
|
3 |
| ||
| Additional paid-in capital |
|
18,168 |
|
|
18,193 |
| ||
| Retained earnings |
|
481 |
|
|
1,900 |
| ||
| Accumulated other comprehensive loss—foreign currency translation adjustment |
|
(502 |
) |
|
(463 |
) | ||
|
|
18,150 |
|
|
19,633 |
| |||
| Less treasury stock, at cost, 27,701 shares in 2002 and 2003 |
|
(100 |
) |
|
(100 |
) | ||
| Total shareholders’ equity |
|
18,050 |
|
|
19,533 |
| ||
| Total liabilities and shareholders’ equity |
$ |
34,816 |
|
$ |
36,642 |
| ||
Exhibit 99.1
MANNATECH, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2003
(in thousands, except per share information)
| Three months ended March 31, |
||||||||
| 2002 |
2003 |
|||||||
| Net sales |
$ |
32,926 |
|
$ |
40,470 |
| ||
| Cost of sales |
|
5,903 |
|
|
6,697 |
| ||
| Commissions and incentives |
|
13,821 |
|
|
16,341 |
| ||
|
|
19,724 |
|
|
23,038 |
| |||
| Gross profit |
|
13,202 |
|
|
17,432 |
| ||
| Operating expenses: |
||||||||
| Selling and administrative expenses |
|
7,502 |
|
|
9,830 |
| ||
| Other operating costs |
|
4,536 |
|
|
5,725 |
| ||
| Total operating expenses |
|
12,038 |
|
|
15,555 |
| ||
| Income from operations |
|
1,164 |
|
|
1,877 |
| ||
| Interest income |
|
74 |
|
|
76 |
| ||
| Interest expense |
|
(6 |
) |
|
(2 |
) | ||
| Other income (expense), net |
|
(17 |
) |
|
112 |
| ||
| Income before income taxes |
|
1,215 |
|
|
2,063 |
| ||
| Income taxes |
|
(619 |
) |
|
(644 |
) | ||
| Net income |
$ |
596 |
|
$ |
1,419 |
| ||
| Earnings per common share: |
||||||||
| Basic |
$ |
0.02 |
|
$ |
0.06 |
| ||
| Diluted |
$ |
0.02 |
|
$ |
0.06 |
| ||
| Weighted-average common shares outstanding: |
||||||||
| Basic |
|
25,135 |
|
|
25,135 |
| ||
| Diluted |
|
25,269 |
|
|
25,251 |
| ||