Mannatech Reports Q4 And Year End Results

 

Mannatech, Incorporated (NASDAQ: MTEX), the founder of the M5M (Mission 5 Million) social entrepreneurial movement, the pioneer of nutritional glycobiology and the global innovator of naturally sourced supplements based on Real Food Technology solutions, announced financial results for its fourth quarter and year end 2014.

Fourth Quarter Results

Fourth quarter net sales for 2014 were $45.2 million, a decrease of 2.8% as compared to $46.5 million in the fourth quarter of 2013. Our net sales increased 0.6% in constant dollars, which is a non-GAAP financial measure that excludes the impact of fluctuations in foreign currency exchange rates.

Net income was $1.9 million, or $0.68 per diluted share, for the fourth quarter of 2014, compared to net income of $2.6 million, or $0.94 per diluted share, for the fourth quarter of 2013.

For the three months ended December 31, 2014, our operations outside of North America accounted for approximately 57.5% of our consolidated net sales, whereas in the same period in 2013, our operations outside of North America accounted for approximately 53.3% of our consolidated sales.

For the three months ended December 31, 2014, net sales for Asia/Pacific increased by $0.9 million, or 4.4%, to $21.5 million as compared to $20.6 million for the same period in 2013. The increase in net sales is primarily due to $0.1 million in net deferred revenue being recognized from our loyalty program and $0.6 million in U^thTM skin care product sales.

For the same period in 2013, we deferred $1.2 million in revenue from our loyalty program, and U^th skin care products had not yet been launched. The increases during the three months ended December 31, 2014 were offset by a $1.2 million unfavorable impact on net sales due to fluctuations in foreign currency exchange rates.

For the three months ended December 31, 2014, net sales for North America decreased by $2.5 million, or 11.5%, to $19.2 million as compared to $21.7 million for the same period in 2013. The decrease in net sales was primarily due to a 10.8% decrease in the number of active associates and members in the region.

For the three months ended December 31, 2014, net sales for Europe, the Middle East and Africa increased by $0.3 million, or 7.1%, to $4.5 million as compared to $4.2 million for the same period in 2013. This increase is primarily due to a $0.3 million increase in U^th skin care product sales and $0.1 million in revenue being deferred from our loyalty program.

For the same period in 2013, $0.3 million in revenue was deferred from our loyalty program and U^th skin care products had not yet been launched. These increases were offset by a $0.4 million unfavorable impact on net sales due to fluctuations in foreign currency exchange rates for the region.

Year End Results

Annual net sales for the year ended 2014 were $190.1 million, up 7.1% from $177.4 million for the year ended 2013. Our net sales increased by $14.1 million, or 7.9%, in constant dollars which is a non-GAAP financial measure that excludes the impact of fluctuations in foreign currency exchange rates.

We reported net income for 2014 of $6.5 million, compared to $3.2 million in 2013. The net income per diluted share was $2.40 in 2014, as compared to $1.18 in 2013.

For the year ended December 31, 2014, our operations outside of North America accounted for approximately 57.5% of our consolidated net sales, whereas in the same period in 2013, our operations outside of North America accounted for approximately 53.7% of our consolidated sales.

For the year ended December 31, 2014, net sales for Asia/Pacific increased by $12.1 million, or 15.1%, to $92.4 million as compared to $80.3 million in 2013.

For the year ended December 31, 2014, net sales for North America decreased by $1.4 million, or 1.7%, to $80.8 million as compared to $82.2 million in 2013.

For the year ended December 31, 2014, net sales for Europe, the Middle East and Africa increased by $2.0 million, or 13.4%, to $16.9 million as compared to $14.9 million in 2013.

In connection with our loyalty program, we recognize the dollar equivalent in revenue of loyalty points as the points are applied or forfeited. During 2014, we recognized $17.0 million revenue and deferred $21.2 million, resulting in a net deferral of $4.2 million. This is a reduction of $1.2 million in net deferred revenue as compared to 2013.

The total number of active new and continuing independent associates and members who purchased our packs or products during the twelve months ended December 31, 2014 and 2013 was approximately 230,000 and 245,000, respectively. The number of new independent associates and members for 2014 was 108,000, compared to 116,000 in 2013.

Dr. Robert Sinnott, Mannatech’s CEO and Chief Science Officer, said, “Our independent associates, particularly in the Asia/Pacific region, have embraced Mannatech’s offer of products and opportunities to expand their sales base. During 2014, we launched the U^th skin care product in our foreign markets that accounted for $11.3 million in additional sales as compared to 2013. We continue to be optimistic about our business offering and the revenue growth across the globe.”

About Mannatech

Mannatech, Incorporated, develops high-quality health, weight and fitness, and skin care products that are based on the solid foundation of nutritional science and development standards. Mannatech is dedicated to its platform of Social Entrepreneurship based on the foundation of promoting, aiding and optimizing childhood nutrition where it is needed most around the world. Mannatech’s proprietary products are available through independent sales associates around the globe including the United States, Canada, South Africa, Australia, New Zealand, Austria, Denmark, Germany, Norway, Sweden, the Netherlands, the United Kingdom, Japan, Taiwan, Singapore, Estonia, Finland, the Republic of Ireland, Czech Republic, the Republic of Korea, Mexico, Namibia, Spain and Hong Kong. For more information, visit Mannatech.com.