Mannatech, Incorporated (MTEX 2.81, −0.05, −1.75%), a global pioneer in the development of high-quality health, weight and fitness and skin care solutions based on nutritional science, reported a net loss of $3.8 million or $0.14 cents per diluted share for the second quarter ending June 30, 2010, compared to a net loss of $5.5 million or $0.21 cents per diluted share for the second quarter of 2009. The company reported an operating loss of $2.1 million for the second quarter 2010 compared to an operating loss of $11.1 million in the second quarter of 2009. Second quarter EBITDA(1) was a positive $0.2 million compared to a negative $6.6 million EBITDA for the second quarter of 2009.
Second quarter net sales for 2010 were $57.6 million, a decrease of 25.8%, compared to $77.6 million in the second quarter of 2009. North American sales declined 32.0% to $31.0 million in the second quarter of 2010 compared to $45.6 million in the second quarter of 2009. Second quarter international sales of $26.6 million decreased 16.9% compared to $32.0 million in the second quarter of 2009.
For the six-months ended June 30, 2010 sales were $118.3 million, down 20.3% from $148.3 million for the same period in 2009. The company reported a net loss for the six month period of $6.6 million, compared to last year's six month net loss of $10.3 million. The loss per share was $0.25, compared to a loss per share of $0.39 for the six months ended June 2009. Sales were considerably higher in the second quarter of 2009 because of the launch of a lower price pack promotion, yet accompanied by higher commission costs.
"Although sales have been sluggish we are implementing the fundamental programs to stabilize the business and reignite growth," said Dr. Robert Sinnott, Co-CEO and chief science officer of Mannatech. "Some of these exciting programs include our expanded web presence, our recent partnership with the International Sport Karate Association (ISKA) and the launch of our Give For Real program. Our strategy is to fully support our independent Associates whether they are driven by the high quality of our products, the passion to help those less fortunate or business building opportunities."
"We continue to manage our cost of sales, commission costs and operating expenses at efficient levels," said Stephen Fenstermacher, Co-CEO and chief financial officer. "Our balance sheet reflects higher cash and cash equivalents compared to year-end 2009, lower outstanding payables and we continue to have essentially no long-term debt. In addition, we have increased operating profit from our international operations. We also remain on track for our launch of operations in Mexico in the first quarter of 2011."
New independent Associates and Members totaled 22,775 in the second quarter of 2010, compared to 43,953 in the second quarter of 2009. The 2009 recruiting number was high due to the launch of the lower pack cost program. Total independent Associate and Member count based on a 12-month trailing period was approximately 450,000 as of June 30, 2010 as compared to 532,000 as of June 30, 2009.
Mannatech will hold a conference call and webcast to discuss this announcement with investors on Thursday, August 5, 2010 at 9:00 a.m. Central Daylight Time, 10:00 a.m. Eastern Daylight Time. Investors may listen to the call by accessing Mannatech's website at http://us.mannatech.com/investorrelations.html.
(1) To supplement Mannatech's consolidated financial statements presented in accordance with the generally accepted accounting principles ("GAAP"), in this press release Mannatech uses the non-GAAP financial measure of EBITDA (defined by the company as earnings before interest, taxes, depreciation and amortization). This measure is not in accordance with, or an alternative to, GAAP. Mannatech's management reviews this non-GAAP measure internally to evaluate its performance and manage its operations. Mannatech believes that the inclusion of EBITDA results provides investors useful and important information regarding Mannatech's operating results.