Mannatech, Incorporated (NASDAQ: MTEX), a global health
and wellness company committed to transforming lives to make a
better world, today announced financial results for its third
quarter of 2021.
Third Quarter End
Results
Third quarter net sales for 2021 were $39.4 million, an increase
of $1.4 million, or 3.9%, as compared to $38.0 million in the third
quarter of 2020. Income from operations increased to $3.3 million
for the third quarter of 2021, from $1.4 million in the same period
in 2020.
Net income was $2.9 million, or $1.44 per diluted share, for the
third quarter of 2021, as compared to net income of $1.6 million,
or $0.76 per diluted share, for the third quarter of 2020.
For the three months ended September 30, 2021, overall selling
and administrative expenses increased by $0.5 million to $7.1
million, as compared to $6.6 million for the same period in 2020.
The increase in selling and administrative expenses consisted of a
$0.9 million increase in payroll costs, which was partially offset
by a $0.3 million decrease in marketing costs and a $0.1 million
decrease in contract labor.
For the three months ended September 30, 2021, other operating
costs decreased by $0.1 million, or 2.0%, to $5.0 million, as
compared to $5.1 million for the same period in 2020. The decrease
in operating costs was primarily due to a $0.3 million increase in
consulting fees, which was offset by a $0.2 million decrease in bad
debt expense and a $0.2 million decrease in sales tax expenses
resulting from less utilization of the loyalty program and a sales
tax audit refund.
For the three months ended September 30, 2021, provision for
taxes was $0.4 million, or an effective rate of 10.7%, which is
different from the federal statutory rate due primarily to the
Company taking the IRC 250 deduction and applying foreign tax
credits. For the three months ended September 30, 2020, provision
for taxes was $22,000, or an effective rate of 1.3%. The effective
tax rate for the three months ended September 30, 2021 and 2020 was
determined based on the estimated annual effective income tax
rate.
The approximate number of new and continuing independent
associate and preferred customer positions held by individuals in
Mannatech’s network and associated with purchases of products as of
September 30, 2021 and 2020 were approximately 166,000 and 180,000,
respectively. Recruitment of new independent associates and
preferred customers decreased by 1.4% to 25,036 in the third
quarter of 2021 as compared to 25,388 in the third quarter of
2020.
Year-to-date Third Quarter
Results
For the nine months ended September 30, 2021, net sales were
$120.3 million, an increase of $8.1 million, or 7.2%, as compared
to $112.2 million for the same period in 2020. Income from
operations increased to $8.1 million for the nine months ended
September 30, 2021, from $4.5 million in the same period in
2020.
Net income was $7.3 million, or $3.47 per diluted share, for the
nine months ended September 30, 2021, as compared to net income of
$5.5 million, or $2.38 per diluted share, for the same period in
2020.
Non-GAAP Measures
In addition to results presented in accordance with GAAP, this
press release and related tables include certain non-GAAP financial
measures, including a presentation of constant dollar measures. We
disclose operating results that have been adjusted to exclude the
impact of changes due to the translation of foreign currencies into
U.S. dollars, including changes in: Net Sales, Gross Profit, and
Income from Operations. We believe that these non-GAAP financial
measures provide useful information to investors because they are
an indicator of the strength and performance of ongoing business
operations. The constant currency figures are financial measures
used by management to provide investors an additional perspective
on trends. Although we believe the non-GAAP financial measures
enhance investors’ understanding of our business and performance,
these non-GAAP financial measures should not be considered an
exclusive alternative to accompanying GAAP financial measures.
Please see the accompanying table entitled "Non-GAAP Financial
Measures" for a reconciliation of these non-GAAP financial
measures.
Safe Harbor statement
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,” “will,” “should,” “hope,”
“could,” “would,” “expects,” “plans,” “intends,” “anticipates,”
“believes,” “estimates,” “approximates,” “predicts,” “projects,”
“potential,” and “continues” 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 United States 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, the impact of COVID-19
on Mannatech’s business, the availability and effectiveness of
vaccines on a widespread basis, the impact of any mutations of the
COVID-19 virus, Mannatech's inability to attract and retain
associates and preferred customers, increases in competition,
litigation, regulatory changes, and its planned growth into new
international markets. Although Mannatech believes that the
expectations, statements, and assumptions reflected in these
forward-looking statements are reasonable, it cautions 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 United States
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.
Individuals interested in Mannatech's products or in exploring
its business opportunity can learn more at Mannatech.com
MANNATECH, INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
information)
ASSETS
September 30, 2021
(unaudited)
December 31, 2020
Cash and cash equivalents
$
27,132
$
22,207
Restricted cash
944
944
Accounts receivable, net of allowance of
$937 and $817 in 2021 and 2020, respectively
142
186
Income tax receivable
327
1,008
Inventories, net
13,853
12,827
Prepaid expenses and other current
assets
2,870
2,962
Deferred commissions
2,297
2,343
Total current assets
47,565
42,477
Property and equipment, net
3,097
4,494
Construction in progress
1,356
864
Long-term restricted cash
1,127
4,346
Other assets
9,674
11,977
Long-term deferred tax assets, net
1,055
1,178
Total assets
$
63,874
$
65,336
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current portion of finance leases
$
76
$
76
Accounts payable
4,731
4,797
Accrued expenses
9,326
8,691
Commissions and incentives payable
10,770
10,998
Taxes payable
2,167
1,400
Current notes payable
211
553
Deferred revenue
5,809
5,472
Total current liabilities
33,090
31,987
Finance leases, excluding current
portion
34
129
Deferred tax liabilities
3
3
Long-term notes payable
—
—
Other long-term liabilities
5,594
7,245
Total liabilities
38,721
39,364
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, 2,742,857 shares issued and 1,921,761
shares outstanding as of September 30, 2021 and 2,742,857 shares
issued and 2,071,081 shares outstanding as of December 31, 2020
—
—
Additional paid-in capital
33,449
33,795
Retained earnings
8,419
2,213
Accumulated other comprehensive income
2,612
5,150
Treasury stock, at average cost, 821,096
shares as of September 30, 2021 and 671,776 shares as of December
31, 2020
(19,327
)
(15,186
)
Total shareholders’ equity
25,153
25,972
Total liabilities and shareholders’
equity
$
63,874
$
65,336
MANNATECH, INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
information)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net sales
$
39,446
$
37,966
$
120,269
$
112,218
Cost of sales
7,903
9,328
25,251
25,044
Gross profit
31,543
28,638
95,018
87,174
Operating expenses:
Commissions and incentives
15,731
15,089
48,227
45,308
Selling and administrative expenses
7,156
6,639
21,838
20,659
Depreciation and amortization expense
408
468
1,360
1,525
Other operating costs
4,962
5,062
15,500
15,180
Total operating expenses
28,257
27,258
86,925
82,672
Income from operations
3,286
1,380
8,093
4,502
Interest income, net
15
10
44
73
Other (expense) income, net
(19
)
248
(149
)
206
Income before income taxes
3,282
1,638
7,988
4,781
Income tax (provision) benefit
(352
)
(22
)
(735
)
753
Net income
$
2,930
$
1,616
$
7,253
$
5,534
Earnings per common share:
Basic
$
1.54
$
0.77
$
3.63
$
2.42
Diluted
$
1.44
$
0.76
$
3.47
$
2.38
Weighted-average common shares
outstanding:
Basic
1,903
2,098
2,010
2,286
Diluted
2,031
2,135
2,095
2,312
Non-GAAP Financial Measures (Sales, Gross Profit and Income
from Operations in Constant Dollars)
To supplement our financial results presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), we disclose operating results that have been adjusted to
exclude the impact of changes due to the translation of foreign
currencies into U.S. dollars, including changes in: Net Sales,
Gross Profit, and Income from Operations. We refer to these
adjusted financial measures as constant dollar items, which are
non-GAAP financial measures. We believe these measures provide
investors an additional perspective on trends. To exclude the
impact of changes due to the translation of foreign currencies into
U.S. dollars, we calculate current year results and prior year
results at a constant exchange rate, which is the prior year’s
rate. Currency impact is determined as the difference between
actual growth rates and constant currency growth rates.
The tables below reconcile third quarter 2021 and year-to-date
constant dollar net sales, gross profit and income from operations
to our GAAP net sales, gross profit and income from operations.
Three-month period ended (in
millions, except percentages)
September 30, 2021
September 30, 2020
Constant $ Change
GAAP Measure: Total $
Non-GAAP Measure: Constant
$
GAAP Measure: Total $
Dollar
Percent
Net Sales
$
39.4
$
38.5
$
38.0
$
0.5
1.3
%
Product
36.9
36.1
35.7
0.4
1.1
%
Pack and associate fees
2.4
2.3
2.0
0.3
15.0
%
Other
0.1
0.1
0.3
(0.2
)
(66.7
)
%
Gross profit
31.5
30.8
28.6
2.2
7.7
%
Income from operations
3.3
3.1
1.4
1.7
121.4
%
Nine-month period ended
(in millions, except
percentages)
September 30, 2021
September 30, 2020
Constant $ Change
GAAP Measure: Total $
Non-GAAP Measure: Constant
$
GAAP Measure: Total $
Dollar
Percent
Net Sales
$
120.3
$
115.4
$
112.2
$
3.2
2.9
%
Product
113.2
108.7
108.7
—
—
%
Pack sales and associate fees
6.5
6.1
2.8
3.3
117.9
%
Other
0.6
0.5
0.7
(0.2
)
(28.6
)
%
Gross Profit
95.0
91.2
87.2
4.0
4.6
%
Income from Operations
8.1
7.0
4.5
2.5
55.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211112005336/en/
Donna Giordano Manager, Executive Office Administration
972-471-6512 ir@mannatech.com www.mannatech.com
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