Mannatech, Incorporated, a leading developer and provider of proprietary nutritional supplements, weight management products and skin care solutions, today reported a loss for the third quarter 2008 of $0.4 million or a $0.02 loss per diluted share, compared to net income of $1.7 million or earnings of $0.07 per diluted share for the third quarter of 2007. The company reported an operating profit of $1.1 million compared to an operating profit of $1.7 million in the third quarter of 2007. Operating profit was offset by net foreign currency transaction losses resulting in a pre-tax loss of $0.7 million, as compared topre-tax income of $2.1 million for the third quarter of 2007.
Third quarter net sales for 2008 were $78.0 million, a decrease of 19.5%, compared to $96.9 million in the third quarter of 2007. The sales decline was largely due to a 25.7% decrease in North America sales compared to the third quarter of 2007. International sales were down 8.8% for the third quarter of 2008 compared to the third quarter of 2007.
Wayne Badovinus, Mannatech's president and CEO commented, "We generated an operating profit for the first time since Q3 of 2007 through a reduction in costs. Achieving an operating profit is significant considering sales had declined. We are committed and determined to effectively operate and grow the business while maintaining this lower cost structure for the next quarter."
Mr. Badovinus continued, "Our U.S. market continues to experience a decline in net sales and recruiting impacted by a significantly weaker economy and ongoing litigation. At the same time, our Associates are re-energized by the launch of OsoLean powder, a supplement that promotes fat loss when combined with the OsoLean Plan and proper exercise.(1) In addition, our Associates are excited about the business building potential from OsoLean powder and our other wellness oriented products."
Total independent Associate and Member count based on a 12-month trailing period decreased to 540,000 for the third quarter of 2008 as compared to 575,000 for the third quarter of 2007. This 6.1% year over year decrease reflects a 28.6% decrease in new Associates and Members compared to the prior year. This decrease was partially offset by higher retention of continuing independent Associates and Members which were up 21,000 in the third quarter of 2008, a 5.5% increase.
Year-to-date sales through September were $256.2 million, down 18.3% from $313.5 million in the third quarter of 2007. The company reported a net loss for the nine-month period of $13.2 million, compared to last year's net income of $10.2 million. The diluted loss per share was $0.50, compared to earnings of $0.38 per diluted share for the nine-months ended September 2007.
(1) This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.
Mannatech will hold a conference call and webcast to discuss this announcement with investors on Friday, November 7, 2008 at 9 a.m. CST, 10 a.m. EST. Investors may listen to the call by accessing Mannatech's website at www.mannatech.com.
Mannatech, Incorporated, is a global wellness solutions provider of innovative, high-quality, proprietary nutritional supplements, skin care products, and weight and fitness products sold through independent Associates and Members located in the United States and the international markets of Canada, Australia, the United Kingdom, Japan, New Zealand, the Republic of Korea, Taiwan, Denmark, Germany, South Africa, and Singapore.
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 "intend," "may," "believes," "plan," "will continue," "expects," "potential," "should," 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, 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 Quarterly Report on Form 10-Q, 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, and Mannatech has no intentions, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.