Mannatech Reports Financial Results for Second Quarter 2024
Mannatech (NASDAQ: MTEX) reported financial results for Q2 2024, showing a 14.9% decrease in net sales to $27.7 million compared to $32.6 million in Q2 2023. The decline was attributed to supply chain constraints, back orders, and weakening economic conditions in Asia. Gross profit margin decreased to 77.1% from 78.5% year-over-year. The company reported a net loss of $0.6 million, or $0.33 per diluted share, compared to a net loss of $1.1 million, or $0.59 per diluted share in Q2 2023. Despite challenges, Mannatech's cash position improved, with cash and cash equivalents increasing by 18.9% to $9.2 million as of June 30, 2024.
Mannatech (NASDAQ: MTEX) ha riportato i risultati finanziari per il secondo trimestre del 2024, mostrando un decremento del 14,9% nelle vendite nette a $27,7 milioni rispetto ai $32,6 milioni del Q2 2023. Il calo è stato attribuito a vincoli nella catena di approvvigionamento, ordini arretrati e condizioni economiche in deterioramento in Asia. Il margine di profitto lordo è sceso al 77,1% rispetto al 78,5% dell'anno precedente. L'azienda ha registrato una perdita netta di $0,6 milioni, ovvero $0,33 per azione diluita, rispetto a una perdita netta di $1,1 milioni, ovvero $0,59 per azione diluita nel Q2 2023. Nonostante le sfide, la posizione di cassa di Mannatech è migliorata, con liquidità e equivalenti di cassa aumentati del 18,9% a $9,2 milioni al 30 giugno 2024.
Mannatech (NASDAQ: MTEX) reportó resultados financieros para el segundo trimestre de 2024, mostrando una disminución del 14,9% en las ventas netas a $27.7 millones en comparación con los $32.6 millones en el Q2 de 2023. La disminución se atribuyó a restricciones en la cadena de suministro, pedidos pendientes y condiciones económicas débiles en Asia. El margen bruto de beneficio disminuyó al 77,1% desde el 78,5% del año anterior. La compañía reportó una pérdida neta de $0,6 millones, o $0,33 por acción diluida, en comparación con una pérdida neta de $1,1 millones, o $0,59 por acción diluida en el Q2 de 2023. A pesar de los desafíos, la posición de caja de Mannatech mejoró, con efectivo y equivalentes de efectivo aumentando un 18,9% a $9,2 millones al 30 de junio de 2024.
Mannatech (NASDAQ: MTEX)는 2024년 2분기 재무 결과를 발표하며 순매출이 14.9% 감소하여 2,770만 달러에 달했다고 보고했습니다. 이는 2023년 2분기의 3,260만 달러에 비해 감소한 수치입니다. 이 감소는 공급망 제약, 주문 대기, 아시아의 경제적 여건 약화에 기인한 것입니다. 총 이익률은 작년 78.5%에서 77.1%로 떨어졌습니다. 회사는 60만 달러의 순손실을 보고했으며, 희석 주당 0.33달러의 손실을 기록했습니다. 이는 2023년 2분기의 순손실 110만 달러, 희석 주당 0.59달러의 손실과 비교됩니다. 어려움에도 불구하고 Mannatech의 현금 위치는 개선되어, 2024년 6월 30일 기준 현금 및 현금성 자산이 18.9% 증가하여 920만 달러에 달했습니다.
Mannatech (NASDAQ: MTEX) a annoncé les résultats financiers du deuxième trimestre 2024, montrant une baisse de 14,9% des ventes nettes à 27,7 millions de dollars par rapport à 32,6 millions de dollars au Q2 2023. Cette baisse a été attribuée à des contraintes d'approvisionnement, des commandes en attente et un affaiblissement des conditions économiques en Asie. La marge brute de profit a diminué à 77,1% contre 78,5% d'une année sur l'autre. L'entreprise a enregistré une perte nette de 0,6 million de dollars, soit 0,33 dollar par action diluée, contre une perte nette de 1,1 million de dollars, soit 0,59 dollar par action diluée au Q2 2023. Malgré les défis, la position de liquidité de Mannatech s'est améliorée, avec une augmentation de 18,9% des liquidités et des équivalents de liquidités à 9,2 millions de dollars au 30 juin 2024.
Mannatech (NASDAQ: MTEX) berichtete über die Finanzergebnisse für das zweite Quartal 2024 und zeigte einen Rückgang der Nettoumsätze um 14,9% auf 27,7 Millionen Dollar im Vergleich zu 32,6 Millionen Dollar im Q2 2023. Der Rückgang wurde auf Einschränkungen in der Lieferkette, Rückstände und schwache wirtschaftliche Bedingungen in Asien zurückgeführt. Die Bruttogewinnmarge sank von 78,5% auf 77,1% im Jahresvergleich. Das Unternehmen meldete einen Nettoverlust von 0,6 Millionen Dollar, bzw. 0,33 Dollar pro verwässerter Aktie, im Vergleich zu einem Nettoverlust von 1,1 Millionen Dollar bzw. 0,59 Dollar pro verwässerter Aktie im Q2 2023. Trotz der Herausforderungen verbesserte sich die Liquiditätsposition von Mannatech, da Bargeld und Bargeldäquivalente um 18,9% auf 9,2 Millionen Dollar zum 30. Juni 2024 anstiegen.
- Cash and cash equivalents increased by 18.9% to $9.2 million
- Foreign exchange gains of $1.1 million in Q2 2024
- Net income of $0.6 million for the first six months of 2024
- Selling and administrative expenses decreased by $2.2 million (17.0%)
- Associate attrition rate decreased by 21%
- Net sales decreased by 14.9% to $27.7 million
- Gross profit margin decreased to 77.1% from 78.5%
- Net loss of $0.6 million in Q2 2024
- Recruiting of new associates and preferred customers decreased by 13.6%
- Weak demand across worldwide operations, especially in Asia/Pacific region
Insights
Mannatech's Q2 2024 results paint a challenging picture. Net sales dropped
While the company managed to reduce selling and administrative expenses by
The company's cash position improved, but this was largely due to
Mannatech's Q2 results reflect broader challenges in the health and wellness industry, particularly in the multi-level marketing (MLM) sector. The
Interestingly, the company maintained its network size at 142,000 despite lower recruitment, indicating improved retention. This could be a silver lining, as retaining existing associates is typically more cost-effective than acquiring new ones. However, the reduced sales per associate in Asia is concerning and may indicate market saturation or increased competition.
The supply chain issues affecting the Americas market highlight the ongoing global logistics challenges many companies face. Mannatech's ability to navigate these hurdles and potentially diversify its supply chain could be important for future performance. The company's focus on cost control is prudent, but sustainable growth will likely require innovative product offerings and marketing strategies to reinvigorate recruitment and sales.
Second Quarter Highlights
-
Net sales for the quarter ended June 30, 2024 were
, as compared to$27.7 million for the same period in 2023, a decrease of$32.6 million , or$4.9 million 14.9% . On a Constant dollar basis (see Non-GAAP Measures, below) our net sales decreased , or$4.2 million 12.9% , and unfavorable foreign exchange caused a decrease in GAAP net sales as compared to the same period in 2023. The decline in revenues was principally due to supply chain constraints, items on back order, and some weakening of economic conditions in$0.7 million Asia . -
Gross profit as a percentage of net sales decreased to
77.1% for three months ended June 30, 2024, as compared to78.5% for the same period in 2023, some of the increase in costs were related to increased freight costs related to back ordered items and running some sales promotions on products thereby reducing our margin. -
Commission expenses for the three months ended June 30, 2024 decreased by
12.5% , or , to$1.6 million , as compared to$11.1 million for the same period in 2023. Commissions are earned from sales. Commission expenses in dollar terms decreased during the three months ended June 30, 2024 primarily due to a decline in our sales. For the three months ended June 30, 2024, commissions as a percentage of net sales increased to$12.7 million 40.0% from38.9% for the same period in 2023. The increase in commissions was due partially to running promotions on our products. -
For the three months ended June 30, 2024, selling and administrative expenses decreased by
, or$2.2 million 17.0% , to , as compared to$10.9 million for the same period in 2023. The decrease in selling and administrative expenses was the result of a$13.1 million reduction in payroll costs, a$0.9 million decrease in legal and consulting fees, a$0.7 million decrease in travel and entertainment costs, a$0.3 million decrease in marketing costs and a$0.2 million decrease in office expenses. Selling and administrative expenses, as a percentage of net sales, for the three months ended June 30, 2024 decreased to$0.1 million 39.1% from40.1% for the same period in 2023. -
Loss from operations was
for the three months ended June 30, 2024 as compared to$1.1 million in the same period last year. On a Constant dollar basis (see Non-GAAP Measures, below), the loss from operations was unfavorably affected by$1.0 million due to foreign exchange. Weaker than expected economic conditions in the Asian markets led to reduced recruiting and lower sales per Associate during the quarter, which caused a reduction to net sales of$0.1 million . Supply chain challenges in the$3.4 million Americas drove a decrease in net sales in the$1.1 million Americas during the quarter. -
Due to the strengthening of the
U.S. Dollar and dissolution of an entity, foreign exchange gains were the three months ended June 30, 2024. This included a one-time gain of$1.1 million during the quarter ended June 30, 2024 attributable to the liquidation of the Company’s entity in$0.2 million Sweden . -
Income tax expense was
for the three months ended June 30, 2024 as compared to$0.5 million in the same period last year.$0.3 million -
Net loss was
for the three months ended June 30, 2024, or$0.6 million per diluted share, as compared to$0.33 , or$1.1 million per diluted share for the three months ended June 30, 2023.$0.59 -
As of June 30, 2024, the company's cash and cash equivalents increased
18.9% , or , to$1.5 million from$9.2 million as of December 31, 2023. Cash used in operations was$7.7 million for the six months ended June 30, 2023 compared to$0.8 million for the same period in 2023. Acquisition of property and equipment decreased for the six months ended June 30, 2024, to$1.3 million compared to$0.1 million for the same period in 2023. Financing activities provided$0.4 million of cash during the quarter ended June 30, 2024. This increase consisted of$3.1 million in gross loan proceeds and use of$3.6 million for the repayment of finance lease obligations and other long-term liabilities. For the six months ended June 30, 2023,$0.5 million was used related to payments for dividends of$1.3 million , repurchase of common stock of$0.7 million and$0.1 million for the repayment of lease obligations and other long-term liabilities. Additionally, foreign exchange effects reduced cash position$0.4 million in the six months ended June 30, 2024, compared to$0.8 million in the same period in 2023.$1.5 million -
The approximate number of new and continuing independent associate and preferred customer positions held by individuals in Mannatech’s network and associated with purchases of its packs or products as of June 30, 2024 and 2023 remained constant at approximately 142,000 as our Associate attrition rate decreased by
21% . Recruiting new associates and preferred customers decreased13.6% in the second quarter of 2024 as compared to the second quarter of 2023.
Landen Fredrick, President and CEO, stated, “We are a multinational company and therefore we are subject to fluctuations in the value of the
Mr. Fredrick continued, “Demand remained weak in the second quarter across our world-wide operations but was most pronounced in our
Mr. Fredrick concluded, “We see continued economic challenges for the remainder of 2024, however, we remain committed to increasing our revenues through increasing the number of our sales associates and preferred customers while maintaining disciplined cost controls.”
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release and related tables include certain non-GAAP financial measures, including a presentation of Constant dollar measures. The company discloses operating results that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into
The company believes that these non-GAAP financial measures provide useful information to investors because they are an indicator of the strength and performance of ongoing business operations. The constant currency figures are financial measures used by management to provide investors with an additional perspective on trends. Although management believes the non-GAAP financial measures enhance investors’ understanding of their business and performance, these non-GAAP financial measures should not be considered an exclusive alternative to accompanying GAAP financial measures. Please see the accompanying table entitled "Non-GAAP Financial Measures" for a reconciliation of these non-GAAP financial measures.
Safe Harbor statement
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,” “will,” “should,” "hope," “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “approximates,” “predicts,” “projects,” “potential,” and “continues” 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 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.
^ Mannatech operates in
Individuals interested in Mannatech's products or in exploring its business opportunity can learn more at Mannatech.com.
MANNATECH, INCORPORATED AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands, except share information) |
|||||||
ASSETS |
June 30, 2024 (unaudited) |
|
December 31, 2023 |
||||
Cash and cash equivalents |
$ |
9,196 |
|
|
$ |
7,731 |
|
Restricted cash |
|
938 |
|
|
|
938 |
|
Accounts receivable, net of allowance of |
|
99 |
|
|
|
91 |
|
Income tax receivable |
|
416 |
|
|
|
465 |
|
Inventories, net |
|
13,155 |
|
|
|
14,535 |
|
Prepaid expenses and other current assets |
|
2,214 |
|
|
|
1,774 |
|
Deferred commissions |
|
1,910 |
|
|
|
2,130 |
|
Total current assets |
|
27,928 |
|
|
|
27,664 |
|
Property and equipment, net |
|
3,303 |
|
|
|
4,147 |
|
Operating lease right-of-use assets |
|
2,807 |
|
|
|
3,315 |
|
Other assets |
|
3,511 |
|
|
|
3,751 |
|
Deferred tax assets, net |
|
1,690 |
|
|
|
1,611 |
|
Long-term restricted cash |
|
676 |
|
|
|
718 |
|
Total assets |
$ |
39,915 |
|
|
$ |
41,206 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Commissions and incentives payable |
$ |
8,011 |
|
|
$ |
8,175 |
|
Accrued expenses |
|
5,965 |
|
|
|
6,779 |
|
Deferred revenue |
|
4,152 |
|
|
|
4,786 |
|
Accounts payable |
|
3,454 |
|
|
|
4,010 |
|
Taxes payable |
|
1,743 |
|
|
|
1,521 |
|
Current notes payable |
|
369 |
|
|
|
240 |
|
Current portion of finance lease liabilities |
|
267 |
|
|
|
269 |
|
Total current liabilities |
|
23,961 |
|
|
|
25,780 |
|
Long-term notes payable |
|
3,600 |
|
|
|
— |
|
Operating lease liabilities, excluding current portion |
|
1,975 |
|
|
|
2,582 |
|
Other long-term liabilities |
|
1,360 |
|
|
|
1,404 |
|
Finance lease liabilities, excluding current portion |
|
820 |
|
|
|
956 |
|
Total liabilities |
|
31,716 |
|
|
|
30,722 |
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
32,982 |
|
|
|
33,309 |
|
Accumulated deficit |
|
(745 |
) |
|
|
(1,301 |
) |
Accumulated other comprehensive loss |
|
(4,102 |
) |
|
|
(1,015 |
) |
Treasury stock, at average cost, 858,043 shares as of June 30, 2024 and 882,703 shares as of December 31, 2023 |
|
(19,936 |
) |
|
|
(20,509 |
) |
Total shareholders’ equity |
|
8,199 |
|
|
|
10,484 |
|
Total liabilities and shareholders’ equity |
$ |
39,915 |
|
|
$ |
41,206 |
|
MANNATECH, INCORPORATED AND SUBSIDIARIES |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(in thousands, except per share information) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net sales |
$ |
27,740 |
|
|
$ |
32,594 |
|
|
$ |
57,133 |
|
|
$ |
66,708 |
|
Cost of sales |
|
6,363 |
|
|
|
7,004 |
|
|
|
12,658 |
|
|
|
14,417 |
|
Gross profit |
|
21,377 |
|
|
|
25,590 |
|
|
|
44,475 |
|
|
|
52,291 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Commissions and incentives |
|
11,660 |
|
|
|
13,465 |
|
|
|
23,345 |
|
|
|
27,022 |
|
Selling and administrative expenses |
|
10,860 |
|
|
|
13,079 |
|
|
|
21,452 |
|
|
|
25,510 |
|
Total operating expenses |
|
22,520 |
|
|
|
26,544 |
|
|
|
44,797 |
|
|
|
52,532 |
|
Loss from operations |
|
(1,143 |
) |
|
|
(954 |
) |
|
|
(322 |
) |
|
|
(241 |
) |
Interest (expense) income, net |
|
(105 |
) |
|
|
(10 |
) |
|
|
(87 |
) |
|
|
14 |
|
Other income, net |
|
1,120 |
|
|
|
150 |
|
|
|
1,990 |
|
|
|
483 |
|
(Loss) income before income taxes |
|
(128 |
) |
|
|
(814 |
) |
|
|
1,581 |
|
|
|
256 |
|
Income tax provision |
|
(496 |
) |
|
|
(291 |
) |
|
|
(1,025 |
) |
|
|
(757 |
) |
Net (loss) income |
$ |
(624 |
) |
|
$ |
(1,105 |
) |
|
$ |
556 |
|
|
$ |
(501 |
) |
(Loss) income per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.33 |
) |
|
$ |
(0.59 |
) |
|
$ |
0.30 |
|
|
$ |
(0.27 |
) |
Diluted |
$ |
(0.33 |
) |
|
$ |
(0.59 |
) |
|
$ |
0.30 |
|
|
$ |
(0.27 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
1,885 |
|
|
|
1,870 |
|
|
|
1,885 |
|
|
|
1,871 |
|
Diluted |
|
1,885 |
|
|
|
1,870 |
|
|
|
1,885 |
|
|
|
1,871 |
|
Net sales by region for the three and six months ended June 30, 2024 and 2023 were as follows (in millions, except percentages): |
|||||||||||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||||
Region |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||||||
|
$ |
9.5 |
|
34.3 |
% |
|
$ |
10.6 |
|
32.5 |
% |
|
$ |
19.7 |
|
34.5 |
% |
|
$ |
21.1 |
|
31.6 |
% |
|
|
15.9 |
|
57.4 |
% |
|
|
19.3 |
|
59.2 |
% |
|
|
33.0 |
|
57.8 |
% |
|
|
40.4 |
|
60.6 |
% |
EMEA |
|
2.3 |
|
8.3 |
% |
|
|
2.7 |
|
8.3 |
% |
|
|
4.4 |
|
7.7 |
% |
|
|
5.2 |
|
7.8 |
% |
Total sales |
$ |
27.7 |
|
100.0 |
% |
|
$ |
32.6 |
|
100.0 |
% |
|
$ |
57.1 |
|
100.0 |
% |
|
$ |
66.7 |
|
100.0 |
% |
Non-GAAP Financial Measures (Sales, Gross Profit and Income from Operations in Constant Dollars)
To supplement its financial results presented in accordance with generally accepted accounting principles in
The tables below reconcile second quarter 2024 and year-to-date Constant dollar net sales, gross profit and income from operations to GAAP net sales, gross profit and income from operations. (in millions, except percentages):
Three-month period ended |
June 30, 2024 |
|
June 30, 2023 |
|
Constant $ Change |
|||||||||||||
|
GAAP
|
Translation
|
Non-GAAP
|
|
GAAP
|
|
Dollar |
Percent |
||||||||||
Net sales |
$ |
27.7 |
|
$ |
0.7 |
$ |
28.4 |
|
|
$ |
32.6 |
|
|
$ |
(4.2 |
) |
(12.9 |
)% |
Gross profit |
|
21.4 |
|
|
0.5 |
|
21.9 |
|
|
|
25.6 |
|
|
|
(3.7 |
) |
(14.5 |
)% |
Loss from operations |
|
(1.1 |
) |
|
0.1 |
|
(1.0 |
) |
|
|
(1.0 |
) |
|
|
— |
|
— |
% |
Six-month period ended |
June 30, 2024 |
|
June 30, 2023 |
|
Constant $ Change |
||||||||||||
|
GAAP
|
Translation
|
Non-GAAP
|
|
GAAP
|
|
Dollar |
Percent |
|||||||||
Net sales |
$ |
57.1 |
|
$ |
1.5 |
$ |
58.6 |
|
$ |
66.7 |
|
|
$ |
(8.1 |
) |
(12.1 |
)% |
Gross profit |
|
44.5 |
|
|
1.2 |
|
45.7 |
|
|
52.3 |
|
|
|
(6.6 |
) |
(12.6 |
)% |
(Loss) income from operations |
|
(0.3 |
) |
$ |
0.4 |
|
0.1 |
|
|
(0.2 |
) |
|
|
0.3 |
|
(150.0 |
)% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240813554364/en/
Erin K. Barta
General Counsel and Corporate Secretary
214-724-3378
ir@mannatech.com
www.mannatech.com
Source: Mannatech, Incorporated
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