Mannatech, Incorporated MTEX , a leading developer and provider of nutritional supplements and skin care products based on Real Food Technology solutions, today announced financial results for its fourth quarter and year end 2013.
Fourth Quarter Results
Fourth quarter net sales for 2013 were $46.5 million, an increase of 9.9% as compared to $42.3 million in the fourth quarter of 2012. Our net sales increased 13.5% in constant dollars, which is a non-GAAP financial measure that excludes the impact of fluctuations in foreign currency exchange rates.
Net sales for Asia/Pacific increased 16.4% to $20.6 million as compared to $17.7 million in the fourth quarter 2012 due to a 21.8% increase in the number of active associates and members in the region. The increases were offset by a $1.1 million unfavorable impact on net sales due to fluctuations in foreign currency exchange rates.
Net sales for North America increased 5.9% to $21.7 million as compared to $20.5 million in the fourth quarter of 2012. The increase in revenue was due to a 13.7% increase in the revenue generated per active associate and member, which was offset by a decline in the number of active associates and members in the region.
Net sales for Europe, the Middle East and Africa increased 2.4% to $4.2 million as compared to $4.1 million in the fourth quarter of 2012. This increase was primarily due to a 13.9% increase in the number of active associates and members, which was offset by a $0.4 million unfavorable impact on net sales due to fluctuations in foreign currency exchange rates for the region.
Net income was $2.6 million, or $0.94 per diluted share, for the fourth quarter of 2013, compared to net income of $0.3 million, or $0.10 per diluted share, for the fourth quarter of 2012.
Dr. Robert A. Sinnott, CEO & Chief Science Officer, commented, “Our net sales growth acceleration in the fourth quarter was primarily due to the introduction of our newest skin care product, Uth, in the U.S. and Canadian markets.”
Year End Results
Annual net sales for 2013 were $177.4 million, up 2.3% from $173.4 million for 2012. Our net sales increased 5.2% in constant dollars which is a non-GAAP financial measure that excludes the impact of fluctuations in foreign currency exchange rates.
During the third quarter of 2013, we implemented a global loyalty program for our associates and members who purchase products using a qualified automatic order. Participating associates and members can earn loyalty points, which can be applied to future purchases. We defer the dollar equivalent in revenue for these loyalty points until the points are applied or forfeited. At December 31, 2013, we deferred net sales of $5.5 million due to the loyalty program.
Net sales for Asia/Pacific increased 13.7% to $80.3 million as compared to $70.6 million in 2012. This increase was due to an increase in the number of active associates and members in the region, which was offset by a decrease in the revenue generated per active associate and member that was partially attributed to the net sales deferral of $2.4 million for the loyalty program and a $3.7 million unfavorable impact on net sales due to fluctuations in foreign currency exchange rates.
Net sales for North America decreased 5.0% to $82.2 million as compared to $86.5 million in 2012. This decrease in revenue is due to the net sales deferral of $2.6 million for the loyalty program and a net reduction in active associates and members, which was offset by an increase in the revenue per active associate and member for the region.
Net sales for Europe, the Middle East and Africa decreased 8.6% to $14.9 million as compared to $16.3 million in 2012. While the number of our active associates and members increased in this region, this was offset by a decrease in average revenue per associate and member. We experienced a $1.3 million unfavorable impact on net sales due to fluctuations in foreign currency exchange rates.
We reported net income for 2013 of $3.2 million, compared to net loss of $1.4 million in 2012. The net income per diluted share was $1.18 in 2013, as compared to the net loss per diluted share of $0.52 in 2012.
The total number of independent associates and members based on a 12-month trailing period was approximately 245,000 and 229,000 as of each of December 31, 2013 and 2012, respectively. The number of new independent associates and members for 2013 was 116,000, compared to 97,000 in 2012, which was an increase of 19,000 over the previous year.
Dr. Robert Sinnott further commented, “During 2013, we implemented changes in our independent associate compensation plan and launched a customer loyalty program, both of which were positively adopted by our independent business building associates. We believe these changes as well as the launch of Uth skin cream were primary drivers for the increase in net sales as compared to 2012. Mannatech has much to offer our independent associates and customers. A strong business with long-term, organic revenue growth across the globe remains the primary objective of our management team.”