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): August 12, 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 12. Results of Operations and Financial Condition
On August 11, 2003, Mannatech, Incorporated, a Texas corporation, issued a press release announcing its financial results for the quarter ended June 30, 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: August 12, 2003 |
/s/ Stephen D. Fenstermacher | |||||||
| Name: Title: |
Stephen D. Fenstermacher Chief Financial Officer | |||||||
EXHIBIT INDEX
| Exhibit Number |
Exhibit | |
| 99.1* | Press release dated August 11, 2003 entitled “Mannatech Reports Growth in Sales and Earnings.” | |
*Filed herewith.
Exhibit 99.1
Mannatech Reports Growth in Sales and Earnings
Coppell, TX, August 11, 2003 – Mannatech, Inc. (NASDAQ: MTEX) today announced that net sales for the three months ended June 30, 2003 reached $46.5 million, an increase of $11.1 million, or 31.4%, as compared to the same quarter in 2002. Mannatech reported net income for the three months ended June 30, 2003 of $1.2 million, or $0.04 per diluted share, which resulted in an increase of $1.0 million, or $0.03 per diluted share, as compared to the same quarter in 2002. Net sales for the six months ended June 30, 2003 increased $18.7 million, or 27.4%, to $87.0 million, as compared to the same period in 2002. Net income for the six months ended June 30, 2003 increased $1.8 million, or 225.0%, to $2.6 million, or $0.10 per diluted share, which was an increase in earnings per share of $0.07 per diluted share, or 233.3%, as compared to the same period in 2002.
Sam Caster, Mannatech’s Chairman and CEO, stated “We are extremely pleased with the strong positive trend in our business. Our record breaking net sales level of $46.5 million for the second quarter of 2003 set a new quarterly record for Mannatech and shows the strength of our sales and the momentum we have built. We believe this achievement reflects the combined efforts of our associates and employees working closely together, around the world. We look forward to introducing our new antioxidant product, Ambrotose A.O., at the end of August. Ambrotose A.O. is the culmination of years of research and we believe it has the potential to become a new industry standard for nutraceuticals.”
For nearly a decade, Mannatech has been 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.
MANNATECH, INCORPORATED
CONSOLIDATED BALANCE SHEETS—UNAUDITED
(in thousands, except share amounts)
| December 31, 2002 |
June 30, 2003 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ | 17,693 | $ | 12,651 | ||||
| Short-term investments |
— | 1,989 | ||||||
| Restricted cash |
— | 2,123 | ||||||
| Accounts receivable |
632 | 519 | ||||||
| Income tax receivable |
307 | 307 | ||||||
| Current portion of notes receivable from shareholders, net of allowance of $31 in 2002 and 2003 |
143 | 56 | ||||||
| Inventories |
5,515 | 5,975 | ||||||
| Prepaid expenses and other current assets |
759 | 1,003 | ||||||
| Deferred tax assets |
1,013 | 1,018 | ||||||
| Total current assets |
26,062 | 25,641 | ||||||
| Property and equipment, net |
7,467 | 6,327 | ||||||
| Notes receivable from shareholders, excluding current portion |
247 | 146 | ||||||
| Long-term investments |
— | 10,000 | ||||||
| Other assets |
1,040 | 1,112 | ||||||
| Total assets |
$ | 34,816 | $ | 43,226 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current portion of capital leases and notes payable |
$ | 136 | $ | 8 | ||||
| Accounts payable |
1,846 | 1,401 | ||||||
| Accrued expenses |
13,739 | 17,972 | ||||||
| Current portion of accrued severance related to former executives |
810 | 820 | ||||||
| Total current liabilities |
16,531 | 20,201 | ||||||
| Capital leases and notes payable, excluding current portion |
8 | 4 | ||||||
| Accrued severance, related to former executives, excluding current portion |
150 | 542 | ||||||
| Deferred tax liabilities |
77 | 83 | ||||||
| Other long-term liabilities |
— | 247 | ||||||
| Total liabilities |
16,766 | 21,077 | ||||||
| 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 25,285,174 shares issued and 25,257,473 outstanding in 2003. |
3 | 3 | ||||||
| Additional paid-in capital |
18,168 | 19,680 | ||||||
| Retained earnings |
481 | 3,071 | ||||||
| Accumulated other comprehensive loss—foreign currency translation adjustment |
(502 | ) | (505 | ) | ||||
| 18,150 | 22,249 | |||||||
| Less treasury stock, at cost, 27,701 shares in 2002 and 2003 |
(100 | ) | (100 | ) | ||||
| Total shareholders’ equity |
18,050 | 22,149 | ||||||
| Total liabilities and shareholders’ equity |
$ | 34,816 | $ | 43,226 | ||||
See accompanying notes to consolidated financial statements.
MANNATECH, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2003
(in thousands, except per share information)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2002 |
2003 |
2002 |
2003 |
|||||||||||||
| Net sales |
$ | 35,395 | $ | 46,519 | $ | 68,320 | $ | 86,989 | ||||||||
| Cost of sales |
5,943 | 7,397 | 11,846 | 14,094 | ||||||||||||
| Commissions and incentives |
15,468 | 19,590 | 29,288 | 35,932 | ||||||||||||
| 21,411 | 26,987 | 41,134 | 50,026 | |||||||||||||
| Gross profit |
13,984 | 19,532 | 27,186 | 36,963 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling and administrative expenses |
8,428 | 9,267 | 15,930 | 19,097 | ||||||||||||
| Other operating costs |
5,420 | 7,162 | 9,957 | 12,886 | ||||||||||||
| Severance expenses |
— | 1,417 | — | 1,417 | ||||||||||||
| Total operating expenses |
13,848 | 17,846 | 25,887 | 33,400 | ||||||||||||
| Income from operations |
136 | 1,686 | 1,299 | 3,563 | ||||||||||||
| Interest income |
71 | 58 | 145 | 134 | ||||||||||||
| Interest expense |
(6 | ) | (2 | ) | (12 | ) | (4 | ) | ||||||||
| Other income (expense), net |
67 | (104 | ) | 50 | 8 | |||||||||||
| Income before income taxes |
268 | 1,638 | 1,482 | 3,701 | ||||||||||||
| Income taxes |
(40 | ) | (467 | ) | (659 | ) | (1,111 | ) | ||||||||
| Net income |
$ | 228 | $ | 1,171 | $ | 823 | $ | 2,590 | ||||||||
| Earnings per common share: |
||||||||||||||||
| Basic |
$ | 0.01 | $ | 0.05 | $ | 0.03 | $ | 0.10 | ||||||||
| Diluted |
$ | 0.01 | $ | 0.04 | $ | 0.03 | $ | 0.10 | ||||||||
| Weighted-average common shares outstanding: |
||||||||||||||||
| Basic |
25,135 | 25,179 | 25,135 | 25,156 | ||||||||||||
| Diluted |
25,360 | 26,526 | 25,327 | 26,618 | ||||||||||||
See accompanying notes to consolidated financial statements.