Mannatech Reports Third Quarter Results

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Higher Commission Rate Impacts Earnings; Recruiting Strength Continues
COPPELL, Texas--(Business Wire)--
Mannatech, Incorporated (NASDAQ: MTEX), a global pioneer in the development of
high-quality health, weight and fitness, and skin care solutions based on
nutritional science, today reported a net loss of $9.2 million or $0.35 per
diluted share for the third quarter ending September 30, 2009, compared to a net
loss of $0.4 million or $0.02 per diluted share for the third quarter of 2008.
The net loss was increased by the change in a valuation of deferred tax assets
in the tax provision. A slightly higher level of commission costs as a
percentage of sales continued to negatively impact net income. Commission costs
as a percentage of sales decreased in the third quarter, as compared to the
second quarter, but were higher than historical levels.

Third quarter net sales for 2009 were $71.3 million, a decrease of 8.6%,
compared to $78.0 million in the third quarter of 2008. North American sales
declined 12.9% compared to the third quarter of 2008. International sales
decreased 2.5% for the third quarter of 2009 compared to the third quarter of
2008. International sales showed some improvement as Canada, Germany, Taiwan and
South Africa were up compared to the third quarter of 2008.

Year-to-date sales for the nine months ended September 30, 2009 were $219.6
million, down 14.3% from $256.2 million for the same period in 2008. The company
reported a net loss for the nine month period of $19.5 million, compared to last
year`s nine month net loss of $13.2 million. The loss per share was $0.74,
compared to a loss per share of $0.50 for the nine months ended September 2008.

Wayne Badovinus, Mannatech`s president and CEO, commented, "The increase in
recruiting evidenced in the first half of this year continued in the recent
quarter. In addition to driving recruiting and pack sales, our focus is turning
to retaining these Associates. We are encouraged that more new Associates are
choosing to continue experiencing the value and quality of Mannatech products,
demonstrated by our ongoing finished product orders. Many new Associates have
reached the designation of regional, national and executive director in the last
few months."

Mr. Badovinus continued, "Each quarter we are making significant strides in the
ongoing evolution of our business. In the third quarter we opened four new
markets - Austria, the Netherlands, Norway and Sweden. In addition, we launched
our Essential Source Omega-3 product with more product introductions scheduled
for the fourth quarter. And we introduced the most complete package of marketing
and business tools for Associates in our history, including DVDs and business
building techniques."

New Associates and Members added in the third quarter of 2009 increased 27.2%
compared to the third quarter of 2008. New independent Associates and Members
totaled 36,689 in the third quarter of 2009, compared to 36,462 added in the
first quarter of 2009, and 28,838 added in the third quarter of 2008. Total
independent Associate and Member count based on a 12-month trailing period was
approximately 534,000 as of September 30, 2009 as compared to 540,000 as of
September 30, 2008.

Conference Call

Mannatech will hold a conference call and webcast to discuss this announcement
with investors on Wednesday, November 4, 2009 at 9:00 a.m. Central Standard
Time, 10:00 a.m. Eastern Standard Time. Investors may listen to the call by
accessing Mannatech`s website at www.mannatech.com.

About Mannatech

Mannatech, Incorporated develops high-quality health, weight and fitness, and
skin care products that are based on the solid foundation of nutritional science
and development standards. These proprietary products are available through
independent sales Associates around the globe including the United States,
Canada, South Africa, Australia, New Zealand, Austria, Denmark, Germany, Norway,
Sweden, the Netherlands, the United Kingdom, Japan, Taiwan, Singapore and the
Republic of Korea.

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," "believe,"
"expect" 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 ability 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.

Net Sales in Dollars and as a Percentage of Consolidated Net Sales - (Unaudited)

Three months Nine months
Country 2009 2008 2009 2008
United States $ 34.0 47.7 % $ 40.0 51.3 % $ 109.7 49.9 % $ 137.3 53.6 %
Japan 9.9 13.9 % 10.8 13.8 % 31.4 14.3 % 33.9 13.3 %
Republic of Korea 6.9 9.7 % 8.4 10.8 % 19.2 8.8 % 27.4 10.7 %
Canada 5.8 8.1 % 5.7 7.3 % 17.5 8.0 % 17.8 6.9 %
Australia 5.7 8.0 % 6.4 8.2 % 16.7 7.6 % 20.8 8.1 %
South Africa(1) 3.9 5.5 % 2.0 2.6 % 9.4 4.2 % 3.4 1.3 %
Taiwan 1.4 2.0 % 1.2 1.5 % 4.8 2.2 % 3.7 1.4 %
New Zealand 1.1 1.5 % 1.2 1.5 % 3.3 1.5 % 4.2 1.6 %
Germany 0.9 1.3 % 0.8 1.0 % 2.6 1.2 % 3.0 1.2 %
United Kingdom(2) 0.8 1.0 % 1.2 1.6 % 2.5 1.1 % 3.8 1.5 %
Denmark 0.5 0.7 % 0.3 0.4 % 1.5 0.7 % 0.9 0.4 %
Singapore(3) 0.4 0.6 % - - 1.0 0.5 % - -
Totals $ 71.3 100 % $ 78.0 100 % $ 219.6 100 % $ 256.2 100 %

(1) South Africa began operations in May 2008.

(2) Net Sales for Austria, the Netherlands, Norway, and Sweden are included in
the United Kingdom net sales total. We began operations in these four countries
in September 2009.

(3) Singapore began operations in November 2008.

The number of new and continuing independent associates and members who
purchased our packs or products during the twelve months ended September 30,
2009 and 2008 were as follows:

2009 2008
New 151,000 28.3 % 140,000 25.9 %
Continuing 383,000 71.7 % 400,000 74.1 %
Total 534,000 100 % 540,000 100 %

MANNATECH, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

September 30, December 31,
2009 2008
ASSETS (unaudited)
Cash and cash equivalents $ 22,577 $ 30,945
Restricted cash 2,350 1,864
Accounts receivable, net of allowance of $16 and $23 in 2009 and 2008, respectively 287 291
Income tax receivable 3,025 3,531
Inventories, net 29,427 31,313
Prepaid expenses and other current assets 3,724 3,946
Deferred income tax assets 4,866 5,632
Total current assets 66,256 77,522
Property and equipment, net 29,547 36,202
Construction in progress 630 840
Long-term restricted cash 7,075 7,579
Other assets 2,516 1,456
Long-term deferred income tax assets 516 459
Total assets $ 106,540 $ 124,058

LIABILITIES AND SHAREHOLDERS` EQUITY
Current portion of capital leases $ 843 $ 131
Accounts payable 6,695 5,067
Accrued expenses 21,904 24,324
Commissions and incentives payable 14,030 11,453
Taxes payable 1,699 873
Current deferred tax liability 225 192
Deferred revenue 3,892 3,476
Total current liabilities 49,288 45,516

Capital leases, excluding current portion 1,272 155
Long-term deferred income tax liabilities 3.616 6,075
Other long-term liabilities 3,446 3,583
Total liabilities 57,622 55,329

Commitments and contingencies

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, 27,687,882 shares issued and 26,480,788 shares outstanding in 2009, and 27,667,882 shares issued and 26,460,788 shares outstanding in 2008. 3 3
Additional paid-in capital 41,243 40,753
Retained earnings 23,593 44,170
Accumulated other comprehensive loss (1,130 ) (1,406 )
Less treasury stock, at cost, 1,207,094 shares in 2009 and 2008 (14,791 ) (14,791 )
Total shareholders` equity 48,918 68,729
Total liabilities and shareholders` equity $ 106,540 $ 124,058

MANNATECH, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED)

(in thousands, except per share information)

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Net sales $ 71,295 $ 77,991 $ 219,640 $ 256,223
Cost of sales 11,923 11,105 35,944 37,014
Commissions and incentives 35,268 32,396 115,413 116,256
47,191 43,501 151,357 153,270
Gross profit 24,104 34,490 68,283 102,953

Operating expenses:
Selling and administrative 17,748 18,753 53,403 63,349
Depreciation and amortization 3,085 3,172 9,357 9,225
Other operating 11,842 11,493 30,831 49,530
Total operating expenses 32,675 33,418 93,591 122,104

Income (loss) from operations (8,571 ) 1,072 (25,308 ) (19,151 )
Interest income 39 266 182 1,219
Other income (expense), net 859 (2,047 ) 822 (2,450 )
Loss before income taxes (7,673 ) (709 ) (24,304 ) (20,382 )
(Provision) benefit for income taxes (1,534 ) 280 4,785 7,134
Net loss $ (9,207 ) $ (429 ) $ (19,519 ) $ (13,248 )

Loss per share:
Basic $ (0.35 ) $ (0.02 ) $ (0.74 ) $ (0.50 )
Diluted $ (0.35 ) $ (0.02 ) $ (0.74 ) $ (0.50 )

Weighted-average common shares outstanding:
Basic 26,464 26,461 26,462 26,461
Diluted 26,464 26,461 26,462 26,461

Mannatech, Incorporated
Gary Spinell, 972-471-6512
Vice President Finance & Administration
ir@mannatech.com
www.mannatech.com
https://new.mannatech.com
www.allaboutmannatech.com

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