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 first quarter of
2021.
First Quarter End
Results
First quarter net sales for 2021 were $38.3 million, an increase
of $1.7 million, or 4.7%, as compared to $36.6 million in the first
quarter of 2020. Income from operations increased to $2.8 million
for the first quarter of 2021, from $2.0 million in the same period
in 2020.
Net income was $2.2 million, or $1.04 per diluted share, for the
first quarter of 2021, as compared to net income of $2.8 million,
or $1.15 per diluted share, for the first quarter of 2020.
Gross profit as a percentage of sales increased to 81.2% for the
three months ended March 31, 2021, as compared to 80.9% for the
same period in 2020.
Commission and incentives as a percentage of net sales remained
constant at 40.7% for each of the three months ended March 31, 2021
and 2020.
For the three months ended March 31, 2021, overall selling and
administrative expenses increased by $0.2 million to $7.1 million,
as compared to $6.9 million for the same period in 2020. The
increase in selling and administrative expenses was due to a $0.3
million increase in payroll costs, a $0.1 million increase in
marketing costs, which was partially offset by a $0.1 million
decrease in stock-based compensation and a $0.1 million decrease in
contract labor costs.
For the three months ended March 31, 2021, other operating costs
decreased by $0.2 million, or 4.4%, to $5.1 million, as compared to
$5.3 million for the same period in 2020. The decrease in operating
costs was primarily due to a $0.3 million decrease in travel and
entertainment and a $0.1 million decrease in office expenses, which
was partially offset by a $0.2 million increase in consulting
fees.
For the three months ended March 31, 2021, provision for taxes
was $0.3 million, or an effective rate of 13.3%. For the three
months ended March 31, 2020, taxes were a $0.9 million benefit. The
effective tax rate for the three months ended March 31, 2021 was
different from the federal statutory rate due primarily to the mix
of earnings across jurisdictions and the associated valuation
allowance recorded on losses in certain jurisdictions.The effective
tax rate for the three months ended March 31, 2020 was different
from the federal statutory rate due primarily to the $1.2 million
benefit recorded in connection with the carryback of U.S. net
operating losses as allowed by the Coronavirus Aid, Relief, and
Economic Security Act (the “CARES Act”), enacted March 27,
2020.
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
March 31, 2021 and 2020 were approximately 187,000 and 166,000,
respectively. Recruitment increased 4.6% in the first quarter of
2021 as compared to the first quarter of 2020. The number of new
independent associate and preferred customer positions in the
company’s network for the first quarter of 2021 was approximately
19,538 as compared to 18,687 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
March 31, 2021
(unaudited)
December 31, 2020
Cash and cash equivalents
$
23,576
$
22,207
Restricted cash
944
944
Accounts receivable, net of allowance of
$872 and $817 in 2021 and 2020, respectively
225
186
Income tax receivable
536
1,008
Inventories, net
13,625
12,827
Prepaid expenses and other current
assets
3,645
2,962
Deferred commissions
2,220
2,343
Total current assets
44,771
42,477
Property and equipment, net
3,949
4,494
Construction in progress
976
864
Long-term restricted cash
3,126
4,346
Other assets
10,866
11,977
Long-term deferred tax assets, net
1,053
1,178
Total assets
$
64,741
$
65,336
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current portion of finance leases
$
89
$
76
Accounts payable
4,836
4,797
Accrued expenses
7,369
8,691
Commissions and incentives payable
11,804
10,998
Taxes payable
1,251
1,400
Current notes payable
755
553
Deferred revenue
5,788
5,472
Total current liabilities
31,892
31,987
Finance leases, excluding current
portion
111
129
Deferred tax liabilities
3
3
Long-term notes payable
—
—
Other long-term liabilities
6,392
7,245
Total liabilities
38,398
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 2,063,280
shares outstanding as of March 31, 2021 and 2,742,857 shares issued
and 2,071,081 shares outstanding as of December 31, 2020
—
—
Additional paid-in capital
33,757
33,795
Retained earnings
4,074
2,213
Accumulated other comprehensive income
3,794
5,150
Treasury stock, at average cost, 679,577
shares as of March 31, 2021 and 671,776 shares as of December 31,
2020
(15,282
)
(15,186
)
Total shareholders’ equity
26,343
25,972
Total liabilities and shareholders’
equity
$
64,741
$
65,336
MANNATECH, INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
information)
Three Months Ended March
31,
2021
2020
Net sales
$
38,319
$
36,605
Cost of sales
7,222
7,008
Gross profit
31,097
29,597
Operating expenses:
Commissions and incentives
15,598
14,889
Selling and administrative expenses
7,111
6,855
Depreciation and amortization expense
510
520
Other operating costs
5,089
5,322
Total operating expenses
28,308
27,586
Income from operations
2,789
2,011
Interest income, net
22
50
Other expense, net
(282
)
(208
)
Income before income taxes
2,529
1,853
Income tax (provision) benefit
(335
)
934
Net income
$
2,194
$
2,787
Earnings per common share:
Basic
$
1.06
$
1.17
Diluted
$
1.04
$
1.15
Weighted-average common shares
outstanding:
Basic
2,071
2,391
Diluted
2,116
2,415
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 first quarter 2021 constant dollar
net sales, gross profit and income from operations to GAAP net
sales, gross profit and income from operations.
March 31, 2021
March 31, 2020
Constant $ Change
GAAP Measure: Total $
Non-GAAP Measure: Constant
$
GAAP Measure: Total $
Dollar
Percent
Net Sales
$
38.3
$
36.8
$
36.6
$
0.2
0.5
%
Product
35.9
34.6
35.9
(1.3
)
(3.6
)%
Pack and associate fees
2.2
2.1
0.5
1.6
320.0
%
Other
0.2
0.2
0.2
—
—
%
Gross profit
31.1
29.9
29.6
0.3
1.0
%
Income from operations
2.8
2.4
2.0
0.4
20.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210511005229/en/
Donna Giordano Manager, Executive Office Administration
972-471-6512 ir@mannatech.com www.mannatech.com
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