Full Press Release Details
Mannatech, Inc. Announces Record Quarterly Sales & Earnings
Coppell, TX November 9, 2004, Mannatech, Incorporated (NASDAQ
MTEX) today announced record sales and earnings for its third quarter ended September 30, 2004 as compared to the same period in 2003. For the three month period ended September 30, 2004, sales reached $77.6 million, a new quarterly sales
record for Mannatech, which was an increase of $27.8 million, or 56.1%, as compared to the prior year. Net income rose to $6.8 million, which more than doubled versus the same period in 2003. Net income as a percentage of net sales increased to 8.8%
of net sales as compared to 5.8% for the same period in 2003. Earnings per share (diluted) for the third quarter of 2004 increased to $0.25 per share, which was an increase of 127.3% as compared to the prior year.
Sales for the nine months ended September 30, 2004 were $210.2 million, up
53.8% versus 2003. Net Income reached $15.5 million, which was an increase of $10.0 million or 183.4% over last year, while earnings per share (diluted) for the nine months ended September 30, 2004 was $0.57, again of 171.4% as compared to the same
The third quarter results represented a new
quarterly record and marks Mannatech s eighth consecutive quarter of successive sales increases, during which time sales have more than doubled. Net sales by country for the three months ended September 30, 2004, in millions, and as a
percentage of total net sales, as well as the number of new and continuing Mannatech independent Associates and members who purchased Mannatech s products within the last 12 months were as follows:
Three months ended September 30,
| United States | Canada | Australia | United Kingdom | Japan | New Zealand | South Korea | Total | |||||||||||||||||||||||||
| 2004 | $ | 51.3 | $ | 5.6 | $ | 8.0 | $ | 2.6 | $ | 6.5 | $ | 3.4 | $ | 0.2 | $ | 77.6 | ||||||||||||||||
| 66.1 | % | 7.2 | % | 10.3 | % | 3.3 | % | 8.4 | % | 4.4 | % | 0.3 | % | 100.0 | % | |||||||||||||||||
| 2003 | $ | 33.4 | $ | 4.1 | $ | 4.2 | $ | 1.3 | $ | 4.9 | $ | 1.8 | $ | 49.7 | ||||||||||||||||||
| 67.2 | % | 8.2 | % | 8.5 | % | 2.6 | % | 9.9 | % | 3.6 | % | 100.0 | % |
| Associates & Members | September 30, 2003 | December 31, 2003 | March 31, 2004 | June 30, 2004 | September 30, 2004 | ||||||||||||||||||||
| New | 125,000 | 51.4 | % | 134,000 | 50.8 | % | 141,000 | 49.1 | % | 150,000 | 47.8 | % | 162,000 | 47.3 | % | ||||||||||
| Continuing | 118,000 | 48.6 | % | 130,000 | 49.2 | % | 146,000 | 50.9 | % | 164,000 | 52.2 | % | 180,000 | 52.7 | % | ||||||||||
| Total | 243,000 | 100.0 | % | 264,000 | 100.0 | % | 287,000 | 100.0 | % | 314,000 | 100.0 | % | 342,000 | 100.0 | % |
Sam Caster, Chairman
and CEO of Mannatech, commented on the records setting results. We have seen our business grow rapidly and successfully for the past eight quarters, through the tremendous labors of our Associates around the world in concert with the highly
focused and motivated activities of our corporate staff. We have also seen our sales double since the string of successive quarterly increases began in the fourth quarter of 2002. This strong trend is rewarding to us, and yet we believe that we have
just begun to realize the potential of the products Mannatech brings to the world. We intend to continue our growth into new markets around the globe, and we welcome into the Mannatech family the Associates in our newest market in South Korea, which
opened in September, 2004.
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.
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 may, believes, estimates, projects, 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
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 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 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
(Unaudited financial schedules to follow)
Mannatech, Incorporated
Stephen Fenstermacher, CFO
MANNATECH, INCORPORATED
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
| December 31, 2003 | September 30, 2004 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 28,291 | $ | 28,598 | ||||
| Restricted cash | 2,140 | 392 | ||||||
| Accounts receivable | 134 | 709 | ||||||
| Current portion of notes receivable from shareholders | 55 | |||||||
| Inventories | 7,861 | 12,857 | ||||||
| Prepaid expenses and other current assets | 2,084 | 3,678 | ||||||
| Deferred tax assets | 2,363 | 3,958 | ||||||
| Total current assets | 42,928 | 50,192 | ||||||
| Property and equipment, net | 5,514 | 8,360 | ||||||
| Long-term investments | 9,994 | 17,088 | ||||||
| Notes receivable from shareholders, excluding current portion | 150 | 157 | ||||||
| Deferred tax assets | 631 | 632 | ||||||
| Restricted cash | 959 | |||||||
| Other assets | 806 | 1,388 | ||||||
| Total assets | $ | 60,023 | $ | 78,776 | ||||
| LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
| Current portion of capital leases and notes payable | $ | 16 | $ | 9 | ||||
| Accounts payable | 2,687 | 1,684 | ||||||
| Accrued expenses | 19,940 | 27,942 | ||||||
| Deferred revenue | 3,142 | 3,498 | ||||||
| Current portion of accrued severance related to former executives | 953 | 420 | ||||||
| Total current liabilities | 26,738 | 33,553 | ||||||
| Capital leases and notes payable, excluding current portion | 32 | 26 | ||||||
| Accrued severance related to former executives, excluding current portion | 359 | 67 | ||||||
| Long-term liabilities | 106 | 1,083 | ||||||
| Deferred tax liabilities | 15 | |||||||
| Total liabilities | 27,235 | 34,744 | ||||||
| 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 26,489,170 shares issued and 26,414,855 outstanding in 2004 | 3 | 3 | ||||||
| Additional paid-in capital | 24,175 | 25,704 | ||||||
| Retained earnings | 9,271 | 19,516 | ||||||
| Accumulated other comprehensive loss | (422 | ) | (629 | ) | ||||
| 33,027 | 44,594 | |||||||
| Less treasury stock, at cost, 43,749 shares in 2003 and 74,315 in 2004 | (239 | ) | (562 | ) | ||||
| Total shareholders equity | 32,788 | 44,032 | ||||||
| Total liabilities and shareholders equity | $ | 60,023 | $ | 78,776 |
MANNATECH, INCORPORATED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2003 | 2004 | 2003 | 2004 | |||||||||||||
| Net sales | $ | 49,738 | $ | 77,577 | $ | 136,727 | $ | 210,282 | ||||||||
| Cost of sales | 8,187 | 11,931 | 22,282 | 31,871 | ||||||||||||
| Commissions and incentives | 20,981 | 34,702 | 56,912 | 94,707 | ||||||||||||
| 29,168 | 46,633 | 79,194 | 126,578 | |||||||||||||
| Gross profit | 20,570 | 30,944 | 57,533 | 83,704 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and administrative expenses | 10,131 | 12,279 | 29,228 | 36,110 | ||||||||||||
| Other operating costs | 6,096 | 9,588 | 18,982 | 24,915 | ||||||||||||
| Severance expenses | 425 | 1,841 | ||||||||||||||
| Total operating expenses | 16,652 | 21,867 | 50,051 | 61,025 | ||||||||||||
| Income from operations | 3,918 | 9,077 | 7,482 | 22,679 | ||||||||||||
| Interest income | 81 | 136 | 214 | 430 | ||||||||||||
| Interest expense | (17 | ) | 0 | (21 | ) | (16 | ) | |||||||||
| Other income (expense), net | 223 | (191 | ) | 232 | (1,038 | ) | ||||||||||
| Income before income taxes | 4,205 | 9,022 | 7,907 | 22,055 | ||||||||||||
| Income taxes | (1,323 | ) | (2,193 | ) | (2,435 | ) | (6,547 | ) | ||||||||
| Net income | $ | 2,882 | $ | 6,829 | $ | 5,472 | $ | 15,508 | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.11 | $ | 0.26 | $ | 0.22 | $ | 0.59 | ||||||||
| Diluted | $ | 0.11 | $ | 0.25 | $ | 0.21 | $ | 0.57 | ||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 25,655 | 26,393 | 25,325 | 26,324 | ||||||||||||
| Diluted | 26,213 | 27,460 | 26,000 | 27,407 |