EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

Mannatech Announces Record Quarterly Net Income and E.P.S.

Net sales exceeded $100 million for the second consecutive quarter

 

Coppell, TX – November 9, 2005 (NASDAQ – MTEX) Mannatech, Inc. today announced financial results for the three months ending September 30, 2005, which included reporting record net income of $8.7 million and record earnings per share (diluted) of $0.32. Consolidated net sales for the 2005 quarter as compared to the same quarter in 2004 increased by 29%, or $22.6 million, to $100.2 million and exceeded the $100 million mark for the second consecutive quarter. Consolidated net income increased by 28% as compared to the prior period in 2004 and earnings per share (diluted) increased 28%. In addition, income before tax increased by 44% to $13.0 million as compared to the same quarter in 2004.

 

Consolidated net sales for the nine months ended September 30, 2005, increased 37%, or $77.7 million to $287.9 million as comparable to 2004. In addition, income before tax increased by 38% to $30.3 million as compared to 2004, consolidated net income increased by 23.9% to $19.2 million, and earnings per share (diluted) increased 21% to $0.69 as compared to 2004. Mannatech believes the increase in its operations for both the three months and the nine months is the result of increasing the number of independent associates and members by 37%, who purchase our products and/or packs, a successful launch of its new product Advanced Ambrotose continued international expansion such as opening operations in Taiwan, as well as selling its packs and products in Denmark.

 

     Three months ended
September 30,


      

Nine months ended

September 30,


 
     2004

    2005

       2004

    2005

 
     (in millions)        (in millions)  

United States

   $ 51.3    66.1 %   $ 66.5    66.3 %      $ 137.6    65.4 %   $ 192.3    66.8 %

Canada

     5.6    7.2 %     7.0    7.0 %        16.1    7.7 %     20.9    7.3 %

Australia

     8.0    10.3 %     9.3    9.3 %        21.8    10.4 %     26.3    9.1 %

United Kingdom

     2.6    3.3 %     2.1    2.1 %        8.0    3.8 %     6.9    2.4 %

Japan

     6.5    8.4 %     9.1    9.1 %        17.4    8.3 %     25.9    9.0 %

New Zealand

     3.4    4.4 %     3.7    3.7 %        9.1    4.3 %     11.3    3.9 %

Republic of Korea

     0.2    0.3 %     1.5    1.5 %        0.2    0.1 %     2.9    1.0 %

Taiwan*

     —      —   %     0.9    0.9 %        —      —   %     1.3    0.5 %

Denmark**

     —      —   %     0.1    0.1 %        —      —   %     0.1    0.0 %
    

  

 

  

    

  

 

  

Totals

   $ 77.6    100 %   $ 100.2    100 %      $ 210.2    100 %   $ 287.9    100 %
    

  

 

  

    

  

 

  

 

Sam Caster, Chairman and C.E.O. of Mannatech, stated “We believe our record earnings and income for the quarter reflect the ongoing strength of our U.S. business combined with aggressive international expansion and continue the successful sales and profit momentum shown by Mannatech for the past several years. Once again we exceeded the sales level of $100 million for the quarter, and this notable achievement was accompanied by record profit and earnings as well. For the quarter, our income before tax of $13.0 million increased by more than 43% compared to the same period in 2004, which more than matched our continued sales trend. We are proud of the efforts of our independent Associates around the world to grow this company, and of the support provided by our staff to allow this growth trend to continue.”

 

     For the twelve months ended September 30,

 

Independent Associates and Members


   2004

       2005

 

New

   162,000    47.3 %      219,000    46.6 %

Continuing

   180,000    52.7 %      251,000    53.4 %
    
  

    
  

Total

   342,000    100.0 %      470,000    100.0 %
    
  

    
  


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


   

September 30,

2005


 
ASSETS                 

Cash and cash equivalents

   $ 44,198     $ 49,015  

Short-term investments

     —         3,956  

Restricted cash

     393       293  

Income tax receivable

     4,161       —    

Accounts receivable

     392       1,021  

Inventories, net

     13,157       20,351  

Prepaid expenses and other current assets

     3,188       3,794  

Deferred tax assets

     1,850       1,476  

Note receivable from affiliate

     144       151  
    


 


Total current assets

     67,483       80,057  

Long-term investments

     17,073       13,375  

Property and equipment, net

     6,469       11,325  

Construction in progress

     3,544       4,980  

Restricted cash

     1,571       3,790  

Other assets

     1,203       1,140  

Deferred tax assets

     1,003       94  
    


 


Total assets

   $ 98,346     $ 114,761  
    


 


LIABILITIES AND SHAREHOLDERS’ EQUITY                 

Accounts payable

   $ 2,227     $ 3,895  

Accrued expenses

     20,389       17,545  

Commissions payable

     12,718       13,449  

Taxes payable

     1,930       5,676  

Deferred revenue

     2,256       4,763  

Accrued severance related to former executives

     375       175  

Current portion of capital leases

     8       27  
    


 


Total current liabilities

     39,903       45,530  

Long-term royalties due to an affiliate

     1,658       3,456  

Long-term liabilities

     530       523  

Capital leases, excluding current portion

     26       —    

Deferred tax liabilities

     4       200  
    


 


Total liabilities

     42,121       49,709  

Commitments and contingencies

                

Shareholders’ equity:

                

Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding

     —         —    

Common stock, $0.0001 par value, 99,000,000 shares authorized, 27,115,440 shares issued and 27,041,125 shares outstanding in 2004 and 27,352,963 shares issued and 26,913,837 shares outstanding in 2005

     3       3  

Additional paid-in capital

     34,917       36,416  

Retained earnings

     21,672       35,212  

Accumulated other comprehensive income (loss)

     195       (788 )
    


 


       56,787       70,843  

Less treasury stock, at cost, 74,315 shares in 2004 and 459,126 shares in 2005

     (562 )     (5,791 )
    


 


Total shareholders’ equity

     56,225       65,052  
    


 


Total liabilities and shareholders’ equity

   $ 98,346     $ 114,761  
    


 



MANNATECH, INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)

(in thousands, except per share information)

 

    

Three months ended

September 30,


   

Nine months ended

September 30,


 
     2004

    2005

    2004

    2005

 

Net sales

   $ 77,577     $ 100,216     $ 210,282     $ 287,960  

Cost of sales

     11,931       14,478       31,871       43,186  

Commissions and incentives

     34,702       44,403       94,707       129,326  
    


 


 


 


       46,633       58,881       126,578       172,512  
    


 


 


 


Gross profit

     30,944       41,335       83,704       115,448  

Operating expenses:

                                

Selling and administrative expenses

     12,279       16,136       36,110       48,595  

Other operating costs

     9,588       12,415       24,915       36,587  
    


 


 


 


Total operating expenses

     21,867       28,551       61,025       85,182  
    


 


 


 


Income from operations

     9,077       12,784       22,679       30,266  

Interest income

     136       469       430       1,254  

Interest expense

     —         —         (16 )     —    

Other expense, net

     (191 )     (288 )     (1,038 )     (1,188 )
    


 


 


 


Income before income taxes

     9,022       12,965       22,055       30,332  

Income taxes

     (2,193 )     (4,232 )     (6,547 )     (11,120 )
    


 


 


 


Net income

   $ 6,829     $ 8,733     $ 15,508     $ 19,212  
    


 


 


 


Earnings per common share:

                                

Basic

   $ 0.26     $ 0.32     $ 0.59     $ 0.71  

Diluted

   $ 0.25     $ 0.32     $ 0.57     $ 0.69  

Weighted-average common shares outstanding:

                                

Basic

     26,393       27,015       26,324       27,065  

Diluted

     27,460       27,738       27,407       27,899