Earnings Labs

Mannatech, Incorporated (MTEX)

Q3 2018 Earnings Call· Sat, Nov 10, 2018

$4.59

-1.98%

Key Takeaways · AI generated
AI summary not yet generated for this transcript. Generation in progress for older transcripts; check back soon, or browse the full transcript below.
Transcript

Operator

Operator

Greetings, and welcome to the Mannatech, Incorporated Third Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Now I'd like to introduce our moderator for the call today, Mr. David Johnson, Chief Financial Officer. Mr. Johnson, you may begin.

David Johnson

Analyst

Thank you. Good morning, everyone. This is David Johnson, and welcome to Mannatech's third quarter 2018 earnings call. Today, you will hear from both me and Mannatech's President and Chief Executive Officer, Al Bala. 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 terminologies such as will, continue, may, believe, intend, expects, potential, should, could, would, anticipate, estimate, project, predict, hope, feel 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 and uncertainties and other factors and speak only as of today. We also refer our listeners to review our SEC submissions. In addition to results presented in accordance to GAAP, I will discuss a non-GAAP financial measure, constant dollar net sales, which is sales that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars. I believe that this non-GAAP financial measure provides useful information to investors as it is an indicator of the strength and performance of our ongoing business operations. This non-GAAP financial measure should not be considered an exclusive alternative to accompanying GAAP financial measures. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure is available on our recently filed 10-Q under the heading Non-GAAP Financial Measures. At this time, I will make a few comments concerning our third quarter of 2018 operating results. Our third quarter income from operations was $1.7 million compared to $0.7 million for the same period last year. Due to taxes, our net loss was $1.7 million…

Al Bala

Analyst

Well, thank you, David, and hello, everyone, and thank you for joining us on our third quarter earning call for 2018. I am Al Bala, Mannatech's CEO and President, and I'd like to discuss the company's third quarter. As David outlined, our net sales in the third quarter was up by $1 million compared to the same quarter last year, with an operating income of $1.6 million. There are two reasons for this increase: first, we attracted 4,000 new independent associate and preferred customers into our rank over the last 12 months, which is an increase of 16.8% compared to the same time last year. And second, we saw our average orders increase by 6.1% from $183 to $194 per order. Raising average order price is hard to do, but we've done it again. And this $11 increase in average order size is significant. We believe that this growth is coming from the maturation of our compensation plan and our proactive strategy to increase our range of offering and capturing a greater share of wallet from customers and associates. We have more people selling Mannatech product and the order size are larger, which is very positive developments. As we look across the globe, our activities in Asia continue to go really well. We saw a 34.2% increase in revenue per active associate and preferred customer, which can be in part explained again by the consolidation of accounts due to the maturation of the compensation plan. But overall, sales in Asia increased by 9% to the tune of $2.2 million, which is largely attributed to excitement around the release of our newest product, Ambrotose LIFE, in Hong Kong and Korea. Ambrotose LIFE is the next-generation version of our signature Ambrotose product, and we believe that for more than 20 years, Ambrotose…

Operator

Operator

These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure or prevent any disease. Thank you for listening to Mannatech's third quarter 2018 earnings call. As a reminder, company information and filings can be found at the company's Investor Relations website, ir.mannatech.com, or by reviewing SEC submissions. This concludes today's call.