Mannatech Reports Declining Sales & Gross Profit in 2020

Mannatech, Incorporated announced its fourth quarter 2020 and full-year results. The company’s Q4 2020 net sales were $39.2 million, a decline of 2.5% on a Constant dollar basis. Foreign exchange during the fourth quarter did create a net sales increase of $0.8 million as compared to the same time period in 2019. Net income for Q4 totaled $0.7 million ($0.34 per diluted share), a significant decline from $2.1 million ($0.87 per diluted share) in Q4 2019.

As a percentage of net sales, incentive costs were up (2% versus 0.9% in 2019) and commissions were slightly down (39% versus 39.9% in 2019). Operating costs decreased by $0.8 million, primarily due to a decrease in travel and entertainment for corporate sponsored events.

Recruiting in the fourth quarter increased by 6.6% over the previous year and the number of new independent associates and preferred customer positions in the company’s network totaled 19,675.

Overall net sales for 2020 decreased by $6.3 million (4%) from 2019, impacted in part by unfavorable foreign currency exchange rates. Net income for 2020 was $6.3 million, or $2.77 per diluted share, an improvement over 2019, which posted a net income of $3.3 million, or $1.35 per diluted share, while gross profit as a percentage of sales in 2020 dropped 3.5%.

Incentive costs were up by 3.8% for the year, but overall selling and administrative expenses decreased 9.7%. This cost savings came from a decrease of $2.5 million in payroll costs, a $0.3 million decrease in stock-based compensation and a $0.2 million decrease in contract labor costs. Operating costs also decreased by 10.4% in 2020.

The company’s tax benefit in 2020 was $0.5 million, down from $2.5 million in 2019, a decrease allowed by the pandemic-associated CARES Act.

At year-end 2020, the company’s cash and cash equivalents were down by 10.5% to $22.2 million, with operations in 2020 generating $6 million in cash. Shareholder dividends in 2020 totaled $3.4 million and repurchases of $5.9 million in common stock.