Full Press Release Details
Mannatech Inc. Announces Another Record-Breaking Year of Annual Sales & Profit
Coppell, TX March 9, 2005 Mannatech, Incorporated
(NASDAQ: MTEX) today announced the achievement of new annual sales and profit records for 2004. Consolidated net sales reached a new high of $294.5 million, an increase of $103.5 million, or 54.2%, as compared to 2003. Mannatech s net income of
$19.6 million more than doubled as compared to the prior year with an increase of $10.8 million, or 122.4%, and earnings per share of $0.71 (diluted) increased 108.8% as compared to 2003. Annual historical sales by market are shown in the table
| 2002 | 2003 | 2004 | ||||||||||||||||
| United States | $ | 105.0 | 74.5 | % | $ | 127.8 | 67.0 | % | $ | 192.5 | 65.4 | % | ||||||
| Canada | $ | 16.4 | 11.6 | % | $ | 16.7 | 8.7 | % | $ | 22.2 | 7.5 | % | ||||||
| Australia | $ | 6.6 | 4.7 | % | $ | 15.6 | 8.2 | % | $ | 30.6 | 10.4 | % | ||||||
| United Kingdom | $ | 1.6 | 1.1 | % | $ | 5.0 | 2.6 | % | $ | 10.5 | 3.6 | % | ||||||
| Japan | $ | 9.0 | 6.4 | % | $ | 18.6 | 9.7 | % | $ | 24.5 | 8.3 | % | ||||||
| New Zealand | $ | 2.3 | 1.7 | % | $ | 7.3 | 3.8 | % | $ | 12.9 | 4.4 | % | ||||||
| South Korea | $ | % | $ | % | $ | 1.3 | 0.4 | % | ||||||||||
| Total | $ | 140.9 | 100.0 | % | $ | 191.0 | 100.0 | % | $ | 294.5 | 100.0 | % |
Fourth quarter results
also included a new consolidated net sales record of $84.2 million for Mannatech, which was an increase of $29.9 million, or 55.1%, as compared to the same period in 2003. Fourth quarter net income was $4.0 million, or $0.15 earnings per share
(diluted), which was an increase of 21.9 % over the fourth quarter of 2003. Net income for the fourth quarter included one-time non-cash charge, totaling $3.0 million, or $0.07 per diluted share, net of tax, related to Mr. Caster s sale of
180,000 shares of his common stock to a former employee, Dr. H. Reginald McDaniel. The sale was for a price that was below the fair market value of Mannatech s stock on the date of the sale. Quarterly sales volumes by market are shown in the
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||||||||||
| United States | $ | 36.8 | 63.0 | % | $ | 49.5 | 66.6 | % | $ | 51.3 | 66.1 | % | $ | 54.8 | 65.2 | % | ||||||||
| Canada | $ | 4.7 | 8.0 | % | $ | 5.8 | 7.8 | % | $ | 5.6 | 7.2 | % | $ | 6.1 | 7.2 | % | ||||||||
| Australia | $ | 6.5 | 11.1 | % | $ | 7.4 | 10.0 | % | $ | 8.0 | 10.3 | % | $ | 8.8 | 10.4 | % | ||||||||
| United Kingdom | $ | 2.8 | 4.8 | % | $ | 2.6 | 3.5 | % | $ | 2.6 | 3.3 | % | $ | 2.5 | 3.0 | % | ||||||||
| Japan | $ | 5.0 | 8.6 | % | $ | 5.9 | 7.9 | % | $ | 6.5 | 8.4 | % | $ | 7.1 | 8.4 | % | ||||||||
| New Zealand | $ | 2.6 | 4.5 | % | $ | 3.1 | 4.2 | % | $ | 3.4 | 4.4 | % | $ | 3.8 | 4.5 | % | ||||||||
| South Korea | $ | % | $ | % | $ | 0.2 | 0.3 | % | $ | 1.1 | 1.3 | % | ||||||||||||
| Total | $ | 58.4 | 100.0 | % | $ | 74.3 | 100.0 | % | $ | 77.6 | 100.0 | % | $ | 84.2 | 100.0 | % |
Mr. Caster commented
on the new all time high record sales volumes for the periods, stating We are extremely pleased with the financial gains and continued strength shown throughout 2004, and also are delighted with the impressive sales momentum generated by our
369,000 current independent Associates and members around the world. Our groundbreaking glyconutritional technology continues to bring hope, health, and opportunity to people in record numbers and we believe that we are just scratching the surface
of the potential of Mannatech.
The number of current
Mannatech independent Associates and members is as follows:
| For the year ended December 31, | |||||||||||||||
| 2002 | 2003 | 2004 | |||||||||||||
| New | 91,000 | 45.6 | % | 134,000 | 50.8 | % | 178,000 | 48.2 | % | ||||||
| Continuing | 109,000 | 54.4 | % | 130,000 | 49.2 | % | 191,000 | 51.8 | % | ||||||
| Total | 200,000 | 100.0 | % | 264,000 | 100.0 | % | 369,000 | 100.0 | % |
About Mannatech, Incorporated
Mannatech, based in Coppell, Texas, is a wellness solution provider that sells its products through a global
network-marketing system throughout the United States and the international markets of Canada, Australia, the United Kingdom, Japan, New Zealand, and South Korea. For additional information about Mannatech, please visit its corporate website:
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, believes, and plans 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 SEC 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 its expectations, statements, and assumptions reflected in these forward-looking statements are reasonable, it
cautions its 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 SEC, 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.
Stephen Fenstermacher
MANNATECH, INCORPORATED
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per
| December 31, | ||||||||
| 2003 | 2004 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 28,291 | $ | 44,198 | ||||
| Restricted cash | 2,140 | 393 | ||||||
| Income tax receivable | 4,161 | |||||||
| Accounts receivable | 134 | 392 | ||||||
| Current portion of notes receivable from affiliates | 55 | 144 | ||||||
| Inventories | 7,861 | 13,157 | ||||||
| Prepaid expenses and other current assets | 2,084 | 3,188 | ||||||
| Deferred tax assets | 2,363 | 1,850 | ||||||
| Total current assets | 42,928 | 67,483 | ||||||
| Property and equipment, net | 5,514 | 10,013 | ||||||
| Long-term investments | 9,994 | 17,073 | ||||||
| Notes receivable from affiliates, excluding current portion | 150 | |||||||
| Deferred tax assets | 631 | 1,003 | ||||||
| Other assets | 806 | 2,774 | ||||||
| Total assets | $ | 60,023 | $ | 98,346 | ||||
| LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
| Current portion of capital leases | $ | 16 | $ | 8 | ||||
| Accounts payable | 2,687 | 2,227 | ||||||
| Accrued expenses | 19,940 | 35,037 | ||||||
| Deferred revenue | 3,142 | 2,256 | ||||||
| Current portion of accrued severance related to former executives | 953 | 375 | ||||||
| Total current liabilities | 26,738 | 39,903 | ||||||
| Capital leases, excluding current portion | 32 | 26 | ||||||
| Accrued severance related to former executives, excluding current portion | 359 | |||||||
| Long-term liabilities | 530 | |||||||
| Long-term royalties due to an affiliate | 106 | 1,658 | ||||||
| Deferred tax liabilities | 4 | |||||||
| Total liabilities | 27,235 | 42,121 | ||||||
| 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, 26,227,171 shares issued and 26,183,422 outstanding in 2003 and 27,115,440 shares issued and 27,041,125 outstanding in 2004 | 3 | 3 | ||||||
| Additional paid-in capital | 24,175 | 34,917 | ||||||
| Retained earnings | 9,271 | 21,672 | ||||||
| Accumulated other comprehensive loss | (422 | ) | 195 | |||||
| 33,027 | 56,787 | |||||||
| Less treasury stock, at cost, 43,749 shares in 2003 and 74,315 shares in 2004 | (239 | ) | (562 | ) | ||||
| Total shareholders equity | 32,788 | 56,225 | ||||||
| Total liabilities and shareholders equity | $ | 60,023 | $ | 98,346 |
MANNATECH, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2003 | 2004 | 2003 | 2004 | |||||||||||||
| Net sales | $ | 54,292 | $ | 84,226 | $ | 191,019 | $ | 294,508 | ||||||||
| Cost of sales | 8,602 | 12,976 | 30,884 | 44,847 | ||||||||||||
| Commissions and incentives | 22,665 | 37,524 | 79,577 | 132,231 | ||||||||||||
| 31,267 | 50,500 | 110,461 | 177,078 | |||||||||||||
| Gross profit | 23,025 | 33,726 | 80,558 | 117,430 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and administrative expenses | 10,765 | 13,896 | 39,993 | 50,006 | ||||||||||||
| Other operating costs | 7,973 | 12,925 | 26,956 | 37,840 | ||||||||||||
| Severance expense | 176 | 2,017 | ||||||||||||||
| Non-cash charge related to affiliate stock sale | 3,047 | 3,047 | ||||||||||||||
| Total operating expenses | 18,914 | 29,868 | 68,966 | 90,893 | ||||||||||||
| Income from operations | 4,111 | 3,858 | 11,592 | 26,537 | ||||||||||||
| Interest income | 134 | 306 | 348 | 735 | ||||||||||||
| Interest expense | (23 | ) | (1 | ) | (44 | ) | (17 | ) | ||||||||
| Other income (expense), net | 610 | 781 | 842 | (257 | ) | |||||||||||
| Income before income taxes | 4,832 | 4,944 | 12,738 | 26,998 | ||||||||||||
| Income taxes | (1,513 | ) | (899 | ) | (3,948 | ) | (7,446 | ) | ||||||||
| Net income | $ | 3,319 | $ | 4,045 | $ | 8,790 | $ | 19,552 | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.13 | $ | 0.15 | $ | 0.34 | $ | 0.74 | ||||||||
| Diluted | $ | 0.12 | $ | 0.15 | $ | 0.34 | $ | 0.71 | ||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 25,996 | 26,768 | 25,494 | 26,436 | ||||||||||||
| Diluted | 26,695 | 27,741 | 26,175 | 27,491 |