Welcome to the Mannatech Incorporated First Quarter 2010 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator's Instructions) As a reminder, this conference is being recorded. Now I would like to introduce our moderator for the call, Mr. Gary Spinell, Senior Vice President of Finance and Administration. Thank you. Mr. Spinell, you may begin.

Thank you and good morning everyone. This is Gary Spinell, and welcome to Mannatech's first quarter 2010 earnings call. Today, you will hear from Mannatech's CO CEOs Dr. Robert Sinnott and Stephen Fenstermacher. Before we begin the call I will first read the Safe Harbor statement. During this conference call we may make forward-looking statements which can involve future events or future financial performance. Forward-looking statements generally can be identified by the use of phrases or terminology such as will continue, may, believe, intend, expects, potential, should, and plan, or other similar words, or the negative of such terminology. We caution listeners that such forward-looking statements are subject to certain events, risks, uncertainties, and other factors, and speak only as of today. We also refer our listeners to review our SEC submission. Thank you, and now I will turn the call over to Dr. Robert Sinnott Co-CEO and Chief Science Officer.

Hello and good morning everyone, this is Rob Sinnott, Co-CEO and Chief Science Officer of Mannatech, I am joined on the call by our Co-CEO Stephen Fenstermacher and President of Global Business Operations and Expansion, Randy Bancino. I appreciate your interest in our company. I will make a few opening comments and then turn the call briefly over to Steve. Since taking on the role of Co-CEO in December, Steve and I have been increasingly involved in all areas of the business. We’re extensively focused on moving the business forward. We’re making moderate yet key changes to several aspects of the business. Mannatech has products that are second to none and a great compensation program. Therefore this fine-tuning is different that’s required to support our associates in reaching out to new customers. These actions are designed to result in potential growth, increased profitability and increased return for our shareholders. Before I comment further on the quarter and our future, I’d like to turn the call briefly over to my Co-CEO Steven Fenstermacher.

Thanks Rob and good morning everyone. The last few months have been extremely busy with our transition into positions as well as maintaining our prior responsibilities as Chief Science officer in Rob’s case and that’s Chief Financial Officer in my case. Both of these positions could be viewed as more than full time spots on their own. Not to mention addition Chief Executive duties as well. We are fortunate that our entire senior staff has pitched in strongly to help distribute the load especially Randy Bancino, who is our head of international, handling operations and expansion too. We’re grateful to these executives who have broadened their list of duties in the interest of returning Mannatech growth in greater profitability. We’re pleased with our team as their efforts will be critical to help us regain momentum. Rob now has commentary.

Thanks Steve. The first quarter of 2010 was one of mix results for Mannatech. We continue to effectively manage our cost of sales, commissions and operating expense levels, while continuing to operate efficiently. The result for the first quarter was that all of these comps were below prior year levels. At the same time, our first quarter sales were below expectations. Sales and recruiting momentum slowed at the end of last year through the holiday period. In addition, this year’s annual incentive did not start until late February versus late January last year. Lastly, there remains some lingering impact on our business worldwide related to the recent economic environment. Consequently our associates face some additional challenges in the marketplace. However, we are addressing these challenges which I will discuss in greater detail in just a few minutes. For the first quarter, we reported a net loss of $2.8 million or $0.11 per share in the first quarter of 2010. This compares to a net loss of $4.8 million or $0.18 per share in the first quarter of 2009. However, our EBITDA was a positive $165,000 meaning that we’re cash flow positive from operations. First quarter 2010 sales were $60.7 million, a decrease of 14% from the same quarter in 2009. North American sales declined 23% compared to the first quarter of 2009 reflecting the delay in starting the incentive program and residual recruiting challenges in the marketplace. International sales were stable for the first quarter of 2010 compared to the same quarter of 2009. We are seeing pockets of significant growth and potential turnaround. For example, sales in south Africa, Taiwan and Singapore were up collectively 43% in the first quarter compared to the first quarter of last year. Regarding recruiting activity, we added 20,930 new associates and members in…

Thanks Rob. For Q1, our total sales were down about 14% due to lower finished product movement as well as pack volume product revenue was reduced by about 10%. The pack sales were lower by only 27%. This change in pack sales reflects the fact that a year ago in January. We reduced the All-Star Pack price by more than 50% in our domestic market going from $1,100 or more down to $499. This move was made to respond to the unfavorable economic situation which was growing rapidly with slowing consumer spending and growing unemployment all around the country. This change lowered the cost to get started with the home-based business. And the new pack price proved to be very popular. Our recruiting increased throughout 2009 due to the pack change. However, we have not seen the expected impact of this higher prior year recruiting as of yet probably due to a number of factors. Those who bought All Star Packs last year have probably encountered the difficulties of breaking into direct sales in an uncertain economic environment. We obviously keep track of the sales trends of our public competitors and it seems that virtually all of these companies have recently reported declining domestic businesses as we have seen. This situation makes it very important for us to concentrate on our domestic market. To this end, we are devoting energy and resources to provide our United States and Canadian associate leadership with the best of rail support we can bring to them including fresh new marketing ideas and promotional materials, a refreshed new website and personal web pages and recruiting tools. Our [Live for Real] campaign which was launched at Manifest in March is growing stronger and we did see an uptick in recruiting in March going along with the…

Well thank you Steve. At our Manifest convention held in March we unveiled Mannatech's new looking feel product approach called Live for Real. Live for Real promises more than tag line, it truly reflects the way of life for our company and our independent sales associates globally. Our real products, real passion and real possibilities philosophy supports people looking to change their life through personal commitment to healthy living and dedication to building a vibrant personal business. Mannatech's promise behind Live for Real philosophy is number one, real products, Mannatech's co-products are based on Mannatech's real food technology solutions which offers food source ingredients that contains standardized levels of natural and plant source nutrients at nutritionally effective levels. Real passion, people behind the promise who share stories from the art and real giving to charitable organization such as MannaRelief. Real possibilities, in incur cum earning opportunity to fund a wellness program or build a business through a wellness consultant approach. Steve and I believe that it will take some time for our business to make a full recovery. But there is no doubt that we have a great associate base, products that are second to none and a generous compensation program. As our associates see that there are many ways to rekindle the passion related to Mannatech. We have the potential to regain momentum and increase shareholder value. Thank you for listening and now we’ll take your questions.

(Operators Instructions). We’ll pause for just a moment to compile the Q&A roster. (Operators Instructions). Presenters, there are no questions at this time.

Hi, this is Rob. At this time if there are no further questions, thank you all very much for taking your time to listen to us today and we will look forward to speaking with you again at the end of the next quarter.

This concludes today’s conference call. You may now disconnect.