EX-99.4 5 dex994.htm PRESS RELEASE DATED AUGUST 9, 2005 Press Release dated August 9, 2005

Exhibit 99.4

 

Mannatech, Inc. Announces Record Quarterly Sales

 

Coppell, TX – August 9, 2005 Mannatech, Inc. (NASDAQ – MTEX) today announced that net sales for the second quarter ended June 30, 2005 not only achieved a new quarterly record but also exceeded $100 million for the first time in the history of the company. Net sales for the quarter of $102.6 million represented an increase of 38% over the same quarter in 2004, and net income for the quarter was $5.8 million, or $0.21 earnings per share (diluted). Comparable figures for the 2004 quarter were net income of $5.6 million and $0.20 earnings per share (diluted).

 

Net sales by market are shown in the table below.

 

     Three months ended June 30,

    Six months ended June 30,

 
     (in millions)

    (in millions)

 
     2004

    2005

    2004

    2005

 

United States

   $ 49.5    66.6 %   $ 69.5    67.7 %   $ 86.3    65.0 %   $ 125.6    66.9 %

Canada

   $ 5.8    7.8 %   $ 7.3    7.1 %   $ 10.5    7.9 %   $ 14.0    7.5 %

Australia

   $ 7.4    10.0 %   $ 8.9    8.7 %   $ 13.9    10.5 %   $ 17.0    9.1 %

United Kingdom

   $ 2.6    3.5 %   $ 2.4    2.3 %   $ 5.4    4.1 %   $ 4.8    2.6 %

Japan

   $ 5.9    7.9 %   $ 9.0    8.8 %   $ 10.9    8.2 %   $ 16.8    8.9 %

New Zealand

   $ 3.1    4.2 %   $ 4.1    4.0 %   $ 5.7    4.3 %   $ 7.7    4.1 %

Republic of Korea*

   $ —      —   %   $ 1.0    1.0 %   $ —      —   %   $ 1.4    0.7 %

Taiwan**

   $ —      —   %   $ 0.4    0.4 %   $ —      —   %   $ 0.4    0.2 %
    

  

 

  

 

  

 

  

Total

   $ 74.3    100.0 %   $ 102.6    100.0 %   $ 132.7    100.0 %   $ 187.7    100.0 %
    

  

 

  

 

  

 

  


* Republic of Korea began its operations in September 2004.
** Taiwan began its operations in June 2005.

 

Net sales for the six months ended June 30, 2005 were $187.7 million, which represented an increase of 41% compared to the same period in 2004, net income for the six month period was $10.5 million, an increase of 21% over 2004, and earnings per share (diluted) of $0.38 was up 19% compared to 2004.

 

The number of new and continuing independent associates and members who purchased Mannatech’s packs or products during the 12 months ended June 30, 2004 and 2005 are as follows:

 

     For the twelve months ended June 30,

 

Independent Associates and Members


   2004

    2005

 

New

   150,000    47.8 %   209,000    47.5 %

Continuing

   164,000    52.2 %   231,000    52.5 %
    
  

 
  

Total

   314,000    100.0 %   440,000    100.0 %
    
  

 
  

 

Sam Caster, Chairman and Chief Executive Officer of Mannatech, commented on the results. “Our continued sales growth shows the value of our glyconutritional supplements to people in countries around the world. For the first time in our history, our volume for the quarter exceeded $100 million with a strong trend line. Mannatech continues to invest in the future of the company, and our earnings in the quarter reflected the impact of non-capitalizable costs associated with entry into recently opened markets in the Republic of Korea and Taiwan, our ongoing integrated systems implementation, and new product research and development. We view these expenditures as necessary to correctly position the company to take advantage of the tremendous growth potential offered by the global market as well as continued growth in our current countries of operation.”


About Mannatech

 

Based in Coppell, Texas, Mannatech, Incorporated is a wellness solutions provider that develops innovative, high-quality, proprietary nutritional supplements, topical products and weight management products, which are sold through a global network-marketing system operating throughout the United States and the international markets of Canada, Australia, the United Kingdom, Japan, New Zealand, the Republic of Korea, Taiwan, and Denmark.

 

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”,” well positioned,” “feels,” 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 release.

 

Contact Information:

 

Steve Fenstermacher, CFO

Investor Relations

972-471-6512

ir@mannatech.com


MANNATECH, INCORPORATED

CONSOLIDATED BALANCE SHEETS – (UNAUDITED)

(in thousands, except share amounts)

 

    

December 31,

2004


   

June 30,

2005


 
ASSETS                 

Cash and cash equivalents

   $ 44,198     $ 55,328  

Short-term investments

     —         2,377  

Restricted cash

     393       287  

Income tax receivable

     4,161       —    

Accounts receivable

     392       1,136  

Inventories, net

     13,157       18,538  

Prepaid expenses and other current assets

     3,188       2,488  

Deferred tax assets

     1,850       1,718  

Notes receivable from affiliate

     144       148  
    


 


Total current assets

     67,483       82,020  

Long-term investments

     17,073       14,942  

Property and equipment, net

     10,013       14,165  

Restricted cash

     1,571       930  

Other assets

     1,203       1,134  

Deferred tax assets

     1,003       1,001  
    


 


Total assets

   $ 98,346     $ 114,192  
    


 


LIABILITIES AND SHAREHOLDERS’ EQUITY                 

Accounts payable

   $ 2,227     $ 1,236  

Accrued expenses

     20,389       19,039  

Commissions payable

     12,718       19,699  

Taxes payable

     1,930       4,354  

Deferred revenue

     2,256       5,575  

Accrued severance related to former executives

     375       292  

Current portion of capital leases

     8       9  
    


 


Total current liabilities

     39,903       50,204  

Long-term royalties due to an affiliate

     1,658       3,588  

Long-term liabilities

     530       515  

Capital leases, excluding current portion

     26       20  

Deferred tax liabilities

     4       4  
    


 


Total liabilities

     42,121       54,331  

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, 27,115,440 shares issued and 27,041,125 outstanding in 2004 and 27,260,172 shares issued and 26,983,672 outstanding in 2005

     3       3  

Additional paid-in capital

     34,917       35,774  

Retained earnings

     21,672       28,363  

Accumulated other comprehensive income (loss)

     195       (489 )
    


 


       56,787       63,651  

Less treasury stock, at cost, 74,315 shares in 2004 and 276,500 shares in 2005

     (562 )     (3,790 )
    


 


Total shareholders’ equity

     56,225       59,861  
    


 


Total liabilities and shareholders’ equity

   $ 98,346     $ 114,192  
    


 



MANNATECH, INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)

(in thousands, except per share information)

 

    

Three months ended

June 30,


   

Six months ended

June 30,


 
     2004

    2005

    2004

    2005

 

Net sales

   $ 74,318     $ 102,599     $ 132,705     $ 187,744  

Cost of sales

     11,283       15,778       19,940       28,708  

Commissions and incentives

     34,139       47,360       60,005       84,924  
    


 


 


 


       45,422       63,138       79,945       113,632  
    


 


 


 


Gross profit

     28,896       39,461       52,760       74,112  

Operating expenses:

                                

Selling and administrative expenses

     11,526       16,340       23,831       32,460  

Other operating costs

     8,342       13,250       15,326       24,170  
    


 


 


 


Total operating expenses

     19,868       29,590       39,157       56,630  
    


 


 


 


Income from operations

     9,028       9,871       13,603       17,482  

Interest income

     155       453       293       785  

Interest expense

     (15 )     —         (16 )     —    

Other expense, net

     (755 )     (808 )     (847 )     (900 )
    


 


 


 


Income before income taxes

     8,413       9,516       13,033       17,367  

Income taxes

     (2,839 )     (3,699 )     (4,354 )     (6,888 )
    


 


 


 


Net income

   $ 5,574     $ 5,817     $ 8,679     $ 10,479  
    


 


 


 


Earnings per common share:

                                

Basic

   $ 0.21     $ 0.22     $ 0.33     $ 0.39  

Diluted

   $ 0.20     $ 0.21     $ 0.32     $ 0.38  

Weighted-average common shares outstanding:

                                

Basic

     26,343       27,073       26,289       27,085  

Diluted

     27,389       27,918       27,380       27,963