Greetings, and welcome to the Mannatech Incorporated third 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 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 & Administration. Thank you Mr. Spinell, you may begin.

Thank you, operator, and good morning everyone. This is Gary Spinell and I welcome to Mannatech's third quarter 2010 earnings call. Today you will hear from Mannatech's Co-CEOs, Dr. Rob Sinnott and Stephen Fenstermacher. Before we begin the call, I would like to 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. Rob 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 International, Randy Bancino. We appreciate your interest in our company. I will make a few opening comments and then turn the call briefly to over to Steve. Before I begin I would like to provide some perspective on Mannatech's business. Our third quarter, new associate and member recruiting levels were almost equal to the second quarter levels. Historically, second quarter recruitment levels are boosted by our annual sales incentive. So this year's third quarter recruiting results are encouraging metrics. We continue to have cash on hand with over $21 million in available cash on the balance sheet, lower accounts payable compared to last quarter and essentially no long term debt. On prior calls we mentioned our goal of producing key associate tools and programs. These instrumental tools and programs were implemented this quarter and met with considerable enthusiasm by our associates. Before I comment further on the quarter and our future, I'd like to turn the call briefly over to my Co-CEO, Steve Fenstermacher.

Thanks Rob and good morning everyone. 2010 has presented us with a continuously challenging economic environment here in our domestic market as well as abroad in our international markets. We've worked diligently to the first nine months of the year to supply our field associates with the strongest ray of support, online and promotional items possible. We believe that these tools will allow our associates to compete effectively for new consumers and business builders even in this unsure economy. The next several quarters will show us how our associates will use these tools and we will continue to support their recruiting efforts both here at home as well as around the world in 2011. Rob now has comments on the quarter.

Thank you, Steve. Our third quarter sales for 2010 at $54.9 million, we're down slightly from the second quarter 2010 sales at 57.6 million. The decrease related to lower sales in North America whereas our international sales were basically flat for the second quarter of this year. In addition, our recruiting for the quarter experienced a modest 2% decline from our second quarter recruiting considering that our annual incentive ended in the second quarter. We are fully aware that we face challenges in regaining full recruiting momentum but remain focused on continuing to implement programs to achieve this goal. Network marketing businesses have a strong psychological component. When our independent associates believe in the company, believe in management and believe in themselves, their momentum of the business can shift rapidly towards growth. Mannatech has seen this during much of our 16 year history. However, during recent years both internal and external factors had contributed to a shift in the company's momentum away from growth and profitability. During early 2010 the senior management team of Mannatech including two new Co-CEOs, a new President of International and a new Senior Vice President for North America divides this strategy for restarting growth in North America and continuing Mannatech's growth abroad. The strategy involves focusing the company's resource on just a handful of key initiatives which were to support the associates' ability to grow their businesses in a dramatically changed business environment. These key initiatives were outlined in previous quarterly earnings calls. By staying focused on these initiatives during the first three quarters of the year, Mannatech was able to launch several exciting new tools and programs during the latter half of 2010, and lay the complex groundwork for successful expansion in New Mexico in early 2011. In September 2010, Mannatech host its annual…

Thanks Rob. To recap results for Q3; total sales of $54.9 million were down about 23% due primarily to lower pack volume. Product revenue was reduced by about 13% but the pack sales decline was significantly greater. We'll speak to that in a moment. Our operating deficit of $3.7 million showed improvement of almost $5 million or 57% compared against last year as expense reductions more than offset the results of lower sales for the quarter. And our net loss of 1.3 million for Q3 improved against 2009 by $7.9 million or 86%. This difference in pack sales that we mentioned reflected the change in our international markets to reduce the All-Star pack price in a similar fashion to the lowering of the All-Star pack price in the domestic market in January 2009. This change significantly adjusted down the cost to start a Mannatech home-based business. As we've noted previously the new pack price proved to be very popular here in our domestic market. Our recruiting increased throughout most of 2009 due to the reduced pack price combined with the commission bonus levels which were then in effect. However, the price modification in our international markets has not generated the higher level of recruiting through the nine months of 2010 that we saw in our home market last year in 2009. International recruiting did move somewhat following the All-Star pack price change but the difference was much smaller than that which was seen in the domestic results in 2009. So far in 2010, our results in the domestic market have declined. So our focus and effort must continue to increase. Mannatech has funneled energy and resources to provide our US and Canadian associate leadership with tools and support which they can use to effectively compete in the current sales environment.…

Thank you, Steve. It's been a very interesting challenge during 2010 to lead a rebalancing of all the factors which have historically made Mannatech grow. Relationships and trust with our independent business owners cannot be underestimated. Without constant input of attention and energy, this relationship can grow rusty and cause damage to the overall business. During the last few months I have attended numerous regional associate meetings throughout North America as well as country conventions in Korea and Japan. I believe that the response from our associates is stronger now than it has been in the past three years. Last week at Korea's convention, attendance exceeded expectations. We are fully aware that increased sales starts with associate enthusiasm and interest. And that enthusiasm and interest appears to be remerging. Also during periods of rapid growth such as Mannatech experience several years back, expenses can grow out of line with the overall business through in prudent investments and inefficient management of resources. At some point these inefficiencies must be addressed, and they are now being addressed. I am confident that this current management team understands the complex factors which govern Mannatech's success. We are dedicated to keeping our attention focused on these factors which drive its top-line while surgically reducing expenses to improve the bottom-line. I have seen first hand the powerful effects when all the driving factors are in alignment to create momentum. With fortitude we will stay this course, confident that we will see continuing improvement in our business over time by adhering to the principals of [attentive] management. Thank you and we will now answer any questions.

(Operator Instructions). Presenters there are no questions at this time.

Thank you. This is Rob. And if there is no further questions, thank you all very much for taking the time to listen to us today and we'll look forward to speaking with you at the end of next quarter.

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