COPPELL, TX, Mar 15, 2007 (MARKET WIRE via COMTEX) -- Mannatech, Inc. (MTEX) today reported record sales for its fourth quarter 2006 of $106.8 million, up 5.3% compared to the same quarter in 2005. Earnings per share decreased 11.8% to $0.30 per diluted share compared to fourth quarter 2005 earnings of $0.34 per diluted share, as the result of a significant investment in the global launch of two major proprietary products. Net income for the quarter was $8.2 million with a net profit to net sales ratio of 7.7% compared to net income of $9.4 million with a net profit to net sales ratio of 9.3% for the same quarter of 2005. Pretax profit was $12.2 million, down 19.0% from prior year's fourth quarter of $15.1 million.
Net sales growth for the quarter was driven by an increase in large pack purchases as well as the launch in late November of PhytoMatrix, a proprietary new multi-vitamin product. Total current Mannatech independent Associates and Members grew to 544,000 as of December 31, 2006, an increase of 11.0% compared to 490,000 as of December 31, 2005. The record current independent Associate and Member count resulted from a higher retention of continuing independent Associates, partially offset by a decrease in new independent Associates for the year.
Sam Caster, Chairman of the Board and CEO, commented, "We're encouraged by strengthening sales in the fourth quarter following softness in the previous quarter. The fourth quarter launch of PhytoMatrix along with sales initiatives helped drive our sales momentum. Momentum continues to build so far in the first quarter of 2007 with higher independent Associate and Member recruitment in anticipation of the global roll-out of our Optimal Skin Care System, primarily in the U.S. and Canada."
The company also announced that the full implementation of the new integrated computer ERP system is on track for the end of March. The required system shutdown for the changeover will result in the shift of approximately one week of sales volume into the second quarter. Mr. Caster added, "The new ERP system with its 'state-of-the-art' fully-integrated processing will allow us to enter new markets faster and more efficiently, streamline the Associate commission payment process, and enhance our ability to manage our business on a global scale."
Annual consolidated net sales for 2006 were a record $410.1 million, up 5.3% from prior year sales of $389.4 million. Sales of finished product grew 8.5% during 2006 as compared to the prior year. Net income for 2006 grew to $32.4 million, a 13.1% increase compared to the prior year net income of $28.6 million and diluted earnings per share grew to $1.19, up 15.5% as compared to $1.03 in the prior year.
Mannatech, Incorporated is a global wellness solutions provider of innovative, high-quality, proprietary nutritional supplements, topical and skin-care products, and weight management 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, and Germany.
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 "may," "believes," "enthusiastic," "encouraged," "demonstrates," "intends," "optimistic," and "plans" 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 its expectations, statements, and assumptions reflected in these forward-looking statements are reasonable, it cautions its 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.