Mannatech, Incorporated, a leading developer and provider of proprietary nutritional supplements, weight management products and skin care solutions, today reported net income for the fourth quarter ending December 31, 2008 of $0.6 million or $0.02 per diluted share, compared to net loss of $3.6 million or $0.13 loss per diluted share for the fourth quarter ending December 31, 2007. The company reported an operating profit of $4.6 million compared to an operating loss of $5.8 million in the fourth quarter of 2007. Operating results were favorably impacted by a partial reversal of a litigation expense accrual.
Fourth quarter net sales for 2008 were $76.5 million, a decrease of 22.9%, compared to $99.2 million in the fourth quarter of 2007. The sales decline was largely due to a 23.9% decrease in North America sales compared to the fourth quarter of 2007. International sales decreased 21.4% for the fourth quarter of 2008 compared to the fourth quarter of 2007 largely due to the negative impact of a strengthening U.S. dollar in
the fourth quarter.
Wayne Badovinus, Mannatech's president and CEO commented, "Although sales are a challenge in this weakened economy, we increased our operating profit and generated net income in the quarter for the first time in over a year. We have maintained a consistent discipline on cost control and the results are now evident. We are confident that we can continue to effectively manage the business while maintaining strong expense control for the foreseeable future."
Mr. Badovinus continued, "Our U.S. market continued to experience a decline in net sales impacted by a significantly weaker economy and previous litigation. At the same time, our major new fat-loss product, Osolean(TM), was launched in the U.S., Korea, and Australia. Osolean has re-energized our Associates and led to an uptick in recruiting in the quarter. The most successful launch in company history, Osolean became available in all remaining markets in early 2009."
Total independent Associate and Member count based on a 12-month trailing period decreased to 531,000 for the fourth quarter of 2008 as compared to 575,000 for the fourth quarter of 2007. This 7.7% year over year decrease reflects a 30.4% 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 14,000 in the fourth quarter of 2008, a 3.6% increase.
Sales for the full year 2008 were $332.7 million, down 19.4% from $412.7 million for the full year 2007. The company reported a net loss for the full year 2008 of $12.6 million, compared to the full year 2007 net income of $6.6 million. The diluted loss per share was $0.48 for the full year 2008, compared to earnings of $0.25 per diluted share for the full year 2007.
Mannatech will hold a conference call and webcast to discuss this announcement with investors on Thursday, March 12, 2009 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 www.mannatech.com.
Mannatech, Incorporated, is a global wellness solutions provider of innovative, high-quality, proprietary dietary supplements, weight management products and skin care solutions 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. For more information please visit www.mannatech.com or www.allaboutmannatech.com.
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" 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.