COPPELL, TX, Nov 09, 2006 (MARKET WIRE via COMTEX) -- Mannatech, Inc. (MTEX) today reported record earnings for its third quarter 2006 of $0.36 cents per diluted share, up 13% from third quarter 2005 earnings of $0.32 per diluted share. Net income for the quarter reached a record of $9.7 million with a net profit ratio of 9.7%. The 1 point net profit rate improvement versus prior year was partially due to a lower effective tax rate in the quarter. Pretax profit was $12.7 million for the quarter compared to $13.0 million, down 0.2% versus prior year.
Total third quarter net sales were $99.6 million, slightly below prior year sales of $100.2 million. Total current Mannatech independent Associates and Members grew to 536,000 as of September 30, 2006, an increase of 14% compared with the same period of the prior year. The record current independent Associate and Member count resulted from a higher retention of continuing Associates, partially offset by a decrease in new Associates for the period.
Sam Caster, Board Chairman and CEO, commented, "Several factors contributed to our sales softness in the quarter. As I indicated in our second quarter call, sales momentum was impacted by a key product reformulation late last year. In addition, the VP of Sales position has remained open since April of this year and that combined with an overhang from negative press may have also impacted recruiting. However, we are pleased with our high retention rate for our Associates, as evidenced by the 36% growth in our continuing associate base and a 4% sales increase in finished product sales for the third quarter versus the prior year quarter."
Mr. Caster continued, "We believe we have taken the necessary steps to address these issues which included the launch of a reformulated Advanced Ambrotose(TM) in mid 2006 and the introduction of a new recruiting incentive program. We expect to announce the addition of a highly experienced direct selling professional for our VP of Sales position in the near future. In addition in the Fourth Quarter we are launching PhytoMatrix, a revolutionary new vitamin/mineral supplement, which we believe will help revitalize both revenue and recruiting."
Net income for the 9 months ending September 30, 2006, grew to $24.2 million, an increase of 26% compared to prior year, and diluted earnings per share grew to $0.89, up 29% through September 2006 versus the prior year. Year-to-date sales through September reached $303.3 million, up 5.3% from 2005. Sales of finished product grew 9% in the same period.
Mannatech also expended $3.0 million to repurchase 213,701 shares of its common stock in the third quarter