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 fourth
quarter of 2020.
Quarter End Results
Fourth quarter net sales for 2020 were $39.2 million, a decrease
of $0.2 million, or 0.5%, as compared to $39.4 million in the
fourth quarter of 2019. During the fourth quarter, our net sales
declined 2.5% on a Constant dollar basis (a Non-GAAP financial
measure); favorable foreign exchange during the fourth quarter
caused an increase of $0.8 million in net sales as compared to the
fourth quarter of 2019. Net income was $0.7 million, or $0.34 per
diluted share, for the fourth quarter 2020, as compared to net
income of $2.1 million, or $0.87 per diluted share, for the fourth
quarter 2019.
Gross profit as a percentage of net sales decreased to 73.3% for
the three months ended December 31, 2020, as compared to 78.9% for
the same period in 2019.
Commissions as a percentage of net sales were 39.0% for the
three months ended December 31, 2020, as compared to 39.9% for the
same period in the prior year. Incentive costs as a percentage of
net sales were 2.0% for the three months ended December 31, 2020,
as compared to 0.9% for the same period in 2019.
For the three months ended December 31, 2020, overall selling
and administrative expenses increased by $1.3 million to $7.2
million, as compared to $5.9 million for the same period in 2019.
The increase in selling and administrative expenses consisted
primarily of a $0.8 million increase in marketing costs, a $0.7
million increase in payroll related costs, which was partially
offset by a $0.2 million decrease in contract labor costs.
For the three months ended December 31, 2020, other operating
costs decreased by $0.8 million to $5.0 million, as compared to
$5.9 million for the same period in 2019. The decrease in other
operating costs was primarily due to a $0.4 million decrease in
travel and entertainment costs associated with our corporate
sponsored events, a $0.2 million decrease in legal and consulting
fees, and a $0.2 million decrease in other operating expenses and
sales tax adjustments.
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 our packs or
products as of December 31, 2020 and 2019 were approximately
183,000 and 169,000, respectively. Recruiting increased 6.6% in the
fourth quarter of 2020 as compared to the fourth quarter of 2019.
The number of new independent associate and preferred customer
positions in the company’s network for the fourth quarter of 2020
was 19,675 as compared to 18,462 in 2019.
Year End Results
Overall net sales decreased $6.3 million, or 4.0%, for 2020, as
compared to 2019. During 2020, fluctuations in foreign currency
exchange rates had an overall unfavorable impact on our net sales.
During 2020, our net sales declined 2.7% on a Constant dollar basis
(a Non-GAAP financial measure); while unfavorable foreign exchange
during 2020 caused a decrease of $2.1 million in net sales as
compared to 2019. Net income for 2020 was $6.3 million, or $2.77
per diluted share, as compared to net income of $3.3 million, or
$1.35 per diluted share, for 2019.
Gross profit as a percentage of net sales decreased to 76.5% for
2020, as compared to 80.0% for 2019.
Commission expenses decreased for the year ended December 31,
2020, by 4.9%, or $3 million to $58.7 million, as compared to $61.7
million for the same period in 2019. Commissions as a percentage of
net sales were 38.8% for the year ending December 31, 2020 and
39.1% for the same period in the prior year.
Incentive costs increased for the year ended December 31, 2020
by 3.8%, or $0.1 million, to $2.7 million, as compared to $2.6
million, for the same period in 2019. The costs of incentives, as a
percentage of net sales increased to 1.8% for the year ended
December 31, 2020, as compared to 1.6% for the same period in
2019.
For the year ended December 31, 2020, overall selling and
administrative expenses decreased by $3.0 million, or 9.7%, to
$27.8 million, as compared to $30.8 million for the same period in
2019. The decrease in selling and administrative expenses consisted
of a $2.5 million decrease in payroll costs, a $0.3 million
decrease in stock-based compensation and a $0.2 million decrease in
contract labor costs.
For the year ended December 31, 2020, other operating costs
decreased by $2.4 million, or 10.4%, to $20.2 million, as compared
to $22.6 million for the same period in 2019. For the year ended
December 31, 2020, other operating costs, as a percentage of net
sales, were 13.4%, as compared to 14.3% for the same period in
2019. The decrease was due to a $1.2 million decrease in travel and
entertainment costs, a $0.6 million decrease in office expenses, a
$0.3 million decrease in legal and consulting fees, and a $0.3
million decrease in credit card fees, sales tax adjustments and
other operating costs.
For the year ended December 31, 2020, our tax benefit was $0.5
million and for the comparable period of 2019, our tax provision
was $2.5 million. For 2020, the Company had a significant decrease
due to the carryback of U.S. net operating losses as allowed by the
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”),
enacted on March 27, 2020. For 2019, the Company’s provision was
impacted by the mix of earnings across jurisdictions, valuation
allowance recorded on certain losses.
As of December 31, 2020, our cash and cash equivalents decreased
by 10.5%, or $2.6 million, to $22.2 million from $24.8 million as
of December 31, 2019. For the year ended December 31, 2020
operations generated $6.0 million of cash. During the year ended
December 31, 2020, we invested $0.9 million in computer hardware
and software. During this period, our financing activities included
repayments of $0.6 million to other long term liabilities and
finance lease obligations. Finally, we are proud that we have
returned shareholder value with $3.4 million for dividends to
shareholders and repurchases of $5.9 million in common stock.
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, 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 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)
December 31, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
$
22,207
$
24,762
Restricted cash
944
943
Accounts receivable, net of allowance of
$817 and $708 in 2020 and 2019, respectively
186
955
Income tax receivable
1,008
220
Inventories, net
12,827
10,152
Prepaid expenses and other current
assets
2,962
2,239
Deferred commissions
2,343
1,758
Total current assets
42,477
41,029
Property and equipment, net
4,494
5,261
Construction in progress
864
865
Long-term restricted cash
4,346
5,295
Other assets
11,977
9,592
Deferred tax assets, net
1,178
881
Total assets
$
65,336
$
62,923
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current portion of finance leases
$
76
$
87
Accounts payable
4,797
3,526
Accrued expenses
8,691
8,209
Commissions and incentives payable
10,998
9,728
Taxes payable
1,400
2,187
Current notes payable
553
739
Deferred revenue
5,472
4,416
Total current liabilities
31,987
28,892
Finance leases, excluding current
portion
129
176
Deferred tax liabilities
3
3
Long-term notes payable
—
363
Other long-term liabilities
7,245
6,214
Total liabilities
39,364
35,648
Commitments and contingencies (Note
11)
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 2,071,081
shares outstanding as of December 31, 2020 and 2,742,857 shares
issued and 2,381,131 shares outstanding as of December 31, 2019
—
—
Additional paid-in capital
33,795
34,143
Retained Earnings (accumulated
deficit)
2,213
(690
)
Accumulated other comprehensive income
5,150
3,757
Treasury stock, at average cost, 671,776
shares as of December 31, 2020 and 361,726 shares as of December
31, 2019, respectively
(15,186
)
(9,935
)
Total shareholders’ equity
25,972
27,275
Total liabilities and shareholders’
equity
$
65,336
$
62,923
MANNATECH, INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
information)
For the three months ended
December 31,
For the years ended December
31,
2020
2019
2020
2019
Net sales
$
39,189
$
39,388
$
151,407
$
157,728
Cost of sales
10,461
8,297
35,505
31,550
Gross profit
28,728
31,091
115,902
126,178
Operating expenses:
Commissions and incentives
16,041
16,064
61,349
64,254
Selling and administrative expenses
7,186
5,916
27,845
30,824
Depreciation and amortization
465
524
1,990
2,088
Other operating costs
5,047
5,858
20,227
22,579
Total operating expenses
28,739
28,362
111,411
119,745
Income (loss) from operations
(11
)
2,729
4,491
6,433
Interest income (expense)
10
67
83
(16
)
Other income (expense), net
945
(1,235
)
1,151
(681
)
Income before income taxes
944
1,561
5,725
5,736
Income tax (provision) benefit
(217
)
544
536
(2,447
)
Net income
$
727
$
2,105
$
6,261
$
3,289
Income per common
share:
Basic
$
0.35
$
0.88
$
2.80
$
1.38
Diluted
$
0.34
$
0.87
$
2.77
$
1.35
Weighted-average
common shares outstanding:
Basic
2,085
2,385
2,235
2,391
Diluted
2,121
2,415
2,264
2,441
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 table below reconciles fourth quarter 2020 constant dollar
sales to GAAP sales.
Sales - Q4 2020
GAAP Measure:
Total $
Non-GAAP Measure:
Constant $
Constant $ Change
Americas
$
10.8
$
10.9
$
0.1
Asia Pacific
$
24.2
$
23.2
(1.0
)
EMEA
$
4.2
$
4.3
0.1
Total
$
39.2
$
38.4
$
(0.8
)
The table below reconciles fiscal year 2019 and 2020 constant
dollar net sales, gross profit and income from operations to GAAP
net sales, gross profit and income from operations.
2020
2019
Constant Dollar Change
GAAP Measure:
Total $
Non-GAAP Measure:
Constant $
GAAP Measure:
Total $
Dollar
Percent
Net sales
151.4
153.5
$
157.7
(4.2
)
(2.7
)
%
Product
146.2
148.2
154.6
(6.4
)
(4.1
)
%
Pack and associate fees
4.2
4.2
2.3
1.9
82.6
%
Other
1.0
1.1
0.8
0.3
37.5
%
Gross profit
115.9
117.3
126.2
(8.9
)
(7.1
)
%
Income (loss) from operations
4.5
4.8
6.4
(1.6
)
(25.0
)
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210319005068/en/
Donna Giordano Manager, Executive Office Administration
972-471-6512 ir@mannatech.com www.mannatech.com
Mannatech (NASDAQ:MTEX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Mannatech (NASDAQ:MTEX)
Historical Stock Chart
From Jul 2023 to Jul 2024