Mannatech Reports Fourth Quarter 2024 Financial Results

Rhea-AI Summary

Mannatech (NASDAQ: MTEX) reported its Q4 2024 financial results, showing mixed performance. Fourth quarter net sales decreased 11.3% to $29.0 million compared to $32.7 million in Q4 2023, with a 9.2% decline on a constant dollar basis.

Despite lower sales, the company improved its gross profit margin to 80.5% (vs 75.4% in Q4 2023) and reduced selling and administrative expenses by $1.7 million. Q4 2024 operating income was $0.9 million, compared to a $0.9 million loss in Q4 2023. Net income reached $2.3 million ($1.20 per diluted share), versus a net loss of $1.8 million in Q4 2023.

For full-year 2024, net sales declined 10.7% to $117.9 million. The company's network decreased to 133,000 associates and preferred customers (from 145,000 in 2023), with recruiting down 19.5%. Despite challenges, Mannatech achieved a net income of $2.5 million ($1.32 per diluted share) in 2024, compared to a $2.2 million loss in 2023, while cash position improved to $11.4 million.

Positive

• Q4 2024 gross profit margin improved to 80.5% from 75.4%
• Q4 operating income of $0.9M vs loss of $0.9M in Q4 2023
• Q4 net income of $2.3M vs net loss of $1.8M year-over-year
• Reduced selling and administrative expenses by $8.5M in 2024
• Cash position improved to $11.4M from $7.7M year-over-year

Negative

• Q4 2024 net sales declined 11.3% to $29.0M
• Full-year 2024 net sales decreased 10.7% to $117.9M
• Associate and preferred customer network decreased by 8.3%
• Recruiting declined 19.5% in Q4 2024
• Gross profit margin for full-year 2024 decreased to 77.6% from 78.0%

Insights

Financial Analyst

Mannatech's Q4 2024 results present a story of profitability improvement despite revenue challenges. The company reported $29.0 million in Q4 net sales, an 11.3% year-over-year decline, yet managed to generate $0.9 million in operating income compared to a $0.9 million operating loss in Q4 2023. This remarkable bottom-line turnaround resulted in Q4 net income of $2.3 million ($1.20 per share).

This profitability was achieved through extensive cost-cutting rather than business growth. Selling and administrative expenses decreased by $1.7 million for the quarter and $8.5 million for the year, with significant reductions in payroll ($3.2 million annually), legal/consulting fees ($1.6 million), and marketing ($1.5 million). While these cuts improved margins, they may compromise future growth capacity.

Particularly concerning are the network marketing metrics - the lifeblood of Mannatech's business model. The company's network decreased from 145,000 to 133,000 positions year-over-year, with recruiting down 19.5% in Q4. These metrics signal fundamental weakness in the company's ability to expand its distribution network.

The improved cash position ($11.4 million vs. $7.7 million year-over-year) provides financial stability, but doesn't address the core business challenges. Gross margin improvement to 80.5% in Q4 is positive, though increased commission rates (40.6% vs. 39.6%) suggest pressure to retain associates.

CEO Fredrick's acknowledgment of "persistent economic challenges" in the Asia/Pacific region without specific remediation plans leaves questions about the strategic direction. The company has effectively traded growth for profitability through aggressive cost management - a strategy that may work short-term but isn't sustainable without eventually stabilizing or growing the revenue base.

FLOWER MOUND, Texas--(BUSINESS WIRE)-- Mannatech, Incorporated (NASDAQ: MTEX), a global health and wellness company committed to transforming lives to make a better world, today announced financial results for its fourth quarter of 2024.

Quarter End Results

Fourth quarter net sales for 2024 were $29.0 million, a decrease of $3.7 million, or 11.3%, as compared to $32.7 million in the fourth quarter of 2023. During the fourth quarter, the company's net sales declined 9.2% on a Constant dollar basis (a Non-GAAP financial measure); unfavorable foreign exchange during the fourth quarter caused a decrease of $0.7 million in net sales as compared to the fourth quarter of 2023.

Gross profit as a percentage of net sales improved to 80.5% for the three months ended December 31, 2024, as compared to 75.4% for the same period in 2023.

Commissions as a percentage of net sales were 40.6% for the three months ended December 31, 2024, as compared to 39.6% for the same period in the prior year. Incentive costs as a percentage of net sales were 1.0% for the three months ended December 31, 2024, as compared to 1.4% for the same period in 2023.

For the three months ended December 31, 2024, overall selling and administrative expenses decreased by $1.7 million to $10.4 million, as compared to $12.1 million for the same period in 2023. The decrease in selling and administrative expenses consisted primarily of a $0.9 million decrease in payroll related costs, a $0.7 million decrease in marketing costs and a $0.1 million decrease in travel and entertainment costs.

Fourth quarter operating income for 2024 was $0.9 million as compared to an operating loss of $0.9 million for the fourth quarter of 2023.

Fourth quarter net income was $2.3 million, or $1.20 per diluted share, for the fourth quarter 2024, as compared to a net loss of $1.8 million, or $0.94 per diluted share, for the fourth quarter 2023.

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 December 31, 2024 and 2023 was approximately 133,000 and 145,000, respectively. Recruiting decreased 19.5% in the fourth quarter of 2024 as compared to the fourth quarter of 2023. The number of new independent associate and preferred customer positions in the company’s network for the fourth quarter of 2024 was 14,615 as compared to 18,156 in 2023.

Year End Results

Net sales for 2024 was $117.9 million, a decrease of $14.1 million, or 10.7%, as compared to $132.0 million in 2023. During 2024, fluctuations in foreign currency exchange rates had an overall unfavorable impact on its net sales. During 2024, the company's net sales declined 8.6% on a Constant dollar basis (a Non-GAAP financial measure); unfavorable foreign exchange during 2024 caused a decrease of $2.7 million in net sales as compared to 2023.

Gross profit as a percentage of net sales decreased to 77.6% for 2024, as compared to 78.0% for 2023 largely due to increased costs related to supply chain challenges, including increased product costs and increased freight costs.

Commissions as a percentage of net sales were 39.2% for the year ending December 31, 2024 and 38.6% for the same period in the prior year. The costs of incentives, as a percentage of net sales decreased to 1.8% for the year ended December 31, 2024, as compared to 2.0% for the same period in 2023.

For the years ended December 31, 2024 and 2023, overall selling and administrative expenses were $41.7 million and $50.2 million, respectively. The decrease of $8.5 million primarily includes a $3.2 million decrease in payroll related costs, $1.6 million decrease in legal and consulting fees, $1.5 million decrease in marketing costs, $0.6 million decrease in miscellaneous operating expenses, $0.5 million decrease in travel and entertainment costs, $0.5 million decrease in office expenses, $0.4 million decrease in credit card fees and $0.2 million decrease in contract labor costs.

Operating income was $1.4 million in 2024 as compared to an operating loss of $1.0 million in 2023.

For the year ended December 31, 2024, the company's tax provision was $1.3 million due to the company recording valuation allowance on losses in certain jurisdictions driven by changes in expected earnings mix between jurisdictions. During 2023, the company's tax provision was $1.1 million due to a mix of earnings across jurisdictions and the associated valuation allowance recorded on losses in certain jurisdictions.

Net income for 2024 was $2.5 million, or $1.32 per diluted share, as compared to net loss of $2.2 million, or $1.20 per diluted share, for 2023.

As of December 31, 2024, the company's cash and cash equivalents increased to $11.4 million from $7.7 million as of December 31, 2023.

Landen Fredrick, President and CEO, acknowledged that "2024 was a challenging year for Mannatech, particularly in the Asia/Pacific region, due to persistent economic challenges. However, through strict cost management, we were able to achieve a positive net income. We remain dedicated to expanding our revenue and carefully managing our expenses moving forward."

Non-GAAP 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 U.S. dollars, including changes in: Net Sales, Gross Profit, and Income from Operations.

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 it 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 China under a cross-border e-commerce platform that is separate from its network marketing model.

Individuals interested in Mannatech's products or in exploring its business opportunity can learn more at Mannatech.com.

MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
	December 31, 2024				December 31, 2023
ASSETS
Cash and cash equivalents	$	11,396			$	7,731
Restricted cash		550				938
Accounts receivable, net of allowance of credit losses of $935 and $1,278 in 2024 and 2023, respectively		19				91
Income tax receivable		737				465
Inventories, net		10,405				14,535
Prepaid expenses and other current assets		1,755				1,774
Deferred commissions		1,259				2,130
Total current assets		26,121				27,664
Property and equipment, net		2,858				4,147
Operating lease right-of-use assets		2,094				3,315
Other assets		2,644				3,751
Deferred tax assets, net		1,770				1,611
Long-term restricted cash		569				718
Total assets	$	36,056			$	41,206
LIABILITIES AND SHAREHOLDERS’ EQUITY
Commissions and incentives payable	$	8,642			$	8,175
Accrued expenses		3,832				5,119
Deferred revenue		3,027				4,786
Accounts payable		2,070				4,010
Current portion of operating lease liabilities		1,178				1,660
Taxes payable		1,788				1,521
Current notes payable		84				240
Current portion of finance lease liabilities		275				269
Total current liabilities		20,896				25,780
Long-term notes payable, excluding current portion		2,900				—
Operating lease liabilities, excluding current portion		1,576				2,582
Other long-term liabilities		1,390				1,404
Finance lease liabilities, excluding current portion		680				956
Total liabilities		27,442				30,722
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding		—				—
Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,742,857 shares issued and 1,884,814 shares outstanding as of December 31, 2024 and 2,742,857 shares issued and 1,860,154 shares outstanding as of December 31, 2023		—				—
Additional paid-in capital		33,027				33,309
Retained earnings (accumulated deficit)		1,189				(1,301	)
Accumulated other comprehensive loss		(5,666	)			(1,015	)
Treasury stock, at average cost, 858,043 shares as of December 31, 2024 and 882,703 shares as of December 31, 2023		(19,936	)			(20,509	)
Total shareholders’ equity		8,614				10,484
Total liabilities and shareholders’ equity	$	36,056			$	41,206

MANNATECH, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
	For the three months ended December 31,								For the years ended December 31,
		2024				2023				2024				2023
Net sales	$	29,007			$	32,694			$	117,866			$	131,955
Cost of sales		5,643				8,048				26,406				29,090
Gross profit		23,364				24,646				91,460				102,865
Operating expenses:
Commissions and incentives		12,072				13,389				48,309				53,588
Selling and administrative expenses		10,428				12,152				41,722				50,241
Total operating expenses		22,500				25,541				90,031				103,829
Income (loss) from operations		864				(895	)			1,429				(964	)
Interest (expense) income, net		(83	)			7				(279	)			4
Other income (expense), net		2,095				(973	)			2,590				(170	)
Income (loss) before income taxes		2,876				(1,861	)			3,740				(1,130	)
Income tax (provision) benefit		(614	)			105				(1,250	)			(1,109	)
Net income (loss)	$	2,262			$	(1,756	)		$	2,490			$	(2,239	)
Income (loss) per common share:
Basic	$	1.20			$	(0.94	)		$	1.32			$	(1.20	)
Diluted	$	1.20			$	(0.94	)		$	1.32			$	(1.20	)
Weighted-average common shares outstanding:
Basic		1,885				1,860				1,885				1,866
Diluted		1,885				1,860				1,885				1,866

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 United States (“GAAP”), Mannatech discloses operating results that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, including changes in: Net Sales, Gross Profit, and Income from Operations. It refers to these adjusted financial measures as constant dollar items, which are non-GAAP financial measures. The company believes these measures provide investors with an additional perspective on trends. To exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, it calculates current year results and prior year results at a constant exchange rate, which is the prior year’s rate. The currency impact is determined by the difference between actual growth rates and constant currency growth rates.

The table below reconciles fourth quarter 2024 constant dollar sales to GAAP sales.

	Sales - Q4 2024
	GAAP Measure: Total $			Non-GAAP Measure: Constant $			Constant $ Change
Americas	$	9.3		$	9.4		$	0.1
Asia Pacific	$	17.4		$	18.1			0.7
EMEA	$	2.3		$	2.2			(0.1	)
Total	$	29.0		$	29.7		$	0.7

The table below reconciles fiscal year 2024 and 2023 constant dollar net sales, gross profit and income from operations to GAAP net sales, gross profit and income from operations.

	2024					2023			Constant Dollar Change
	GAAP Measure: Total $		Non-GAAP Measure: Constant $		GAAP Measure: Total $				Dollar			Percent
Net sales	117.9		120.6		$	132.0			(11.4	)		(8.6	)%
Gross profit	91.5		93.7			102.9			(9.2	)		(8.9	)%
Income (loss) from operations	1.4		2.2			(1.0	)		3.2			(320.0	)%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250326495457/en/

Erin K. Barta

General Counsel and Corporate Secretary

214-724-3378

ir@mannatech.com

www.mannatech.com

Source: Mannatech, Incorporated

FAQ

What were Mannatech's (MTEX) Q4 2024 earnings per share?

Mannatech reported earnings of $1.20 per diluted share in Q4 2024, compared to a loss of $0.94 per share in Q4 2023.

How much did Mannatech's (MTEX) revenue decline in Q4 2024?

Mannatech's Q4 2024 net sales declined by $3.7 million or 11.3% to $29.0 million compared to $32.7 million in Q4 2023.

What was Mannatech's (MTEX) gross profit margin in Q4 2024?

Mannatech's gross profit margin improved to 80.5% in Q4 2024, up from 75.4% in Q4 2023.

How much cash does Mannatech (MTEX) have as of December 2024?

Mannatech's cash and cash equivalents increased to $11.4 million as of December 31, 2024, up from $7.7 million in 2023.

How many associates and preferred customers did Mannatech (MTEX) have in 2024?

Mannatech had approximately 133,000 associates and preferred customers as of December 31, 2024, down from 145,000 in 2023.