MANNATECH INC
For the period ended Dec 31, 2024. Filed Mar 26, 2025.
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FY2024 · Filed Mar 26, 2025
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Index to Consolidated Financial Statements
| Page | |
| Report of Independent Registered Public Accounting Firm | F-2 |
|---|---|
| Consolidated Balance Sheets as of December 31, 2024 and 2023 | F-4 |
| Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 | F-6 |
| Consolidated Statements of Comprehensive Loss for the years ended December 31, 2024 and 2023 | F-6 |
| Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024 and 2023 | F-7 |
| Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 | F-8 |
| Notes to Consolidated Financial Statements | F-10 |
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Mannatech, Incorporated
Flower Mound, Texas
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Mannatech, Incorporated (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for each of the years then ended and the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Evaluation of the Company’s Determination of Transfer Pricing Policies
As described in Note 1 to the consolidated financial statements, the Company is subject to transfer pricing tax regulations designed to ensure the appropriate allocation of income and expenses between the U.S. and foreign entities and that the Company is taxed accordingly. As disclosed in Note 7 to the consolidated financial statements, the Company’s income before income taxes of $3.7 million for the year ended December 31, 2024 comprised of income before income taxes of $0 million in the United States and $3.7 million outside of the United States. This is in part a function of the Company’s transfer pricing policies, which govern the allocation of taxable income and expenses among the Company’s various tax jurisdictions.
We identified the Company’s determination of transfer pricing policies as a critical audit matter. The principal consideration for our determination was that the tax regulations that exist over transfer pricing are subjective and vary by jurisdiction. Auditing management’s transfer pricing studies and transfer pricing policies was especially challenging and required significant auditor judgement, including the involvement of tax professionals with specialized knowledge and skill.
The primary procedures we performed to address this critical audit matter included:
Utilizing personnel with specialized knowledge and skill in transfer pricing regulations to assist in evaluating (i) the Company’s transfer pricing policies, which is based on comparisons to comparable companies and precedents set by the various taxing authorities that govern the jurisdictions in which the Company operates, and (ii) jurisdictional profit or loss margins to ensure that the Company’s intercompany transactions and other income and expense allocation methodologies are appropriate and comply with the Company’s transfer pricing policies.
/s/ BDO USA, P.C.
We have served as the Company's auditor since 2007.
Dallas, Texas
March 25, 2025
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| ASSETS | ||
| Cash and cash equivalents | $11,396 | $7,731 |
| Restricted cash | 550 | 938 |
| Accounts receivable, net of allowance of credit losses of $935 and $1,278 in 2024 and 2023, respectively | 19 | 91 |
| Income tax receivable | 737 | 465 |
| Inventories, net | 10,405 | 14,535 |
| Prepaid expenses and other current assets | 1,755 | 1,774 |
| Deferred commissions | 1,259 | 2,130 |
| Total current assets | 26,121 | 27,664 |
| Property and equipment, net | 2,858 | 4,147 |
| Operating lease right-of-use assets | 2,094 | 3,315 |
| Other assets | 2,644 | 3,751 |
| Deferred tax assets, net | 1,770 | 1,611 |
| Long-term restricted cash | 569 | 718 |
| Total assets | $36,056 | $41,206 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Commissions and incentives payable | $8,642 | $8,175 |
| Accrued expenses | 3,832 | 5,119 |
| Deferred revenue | 3,027 | 4,786 |
| Accounts payable | 2,070 | 4,010 |
| Current portion of operating lease liabilities | 1,178 | 1,660 |
| Taxes payable | 1,788 | 1,521 |
| Current notes payable | 84 | 240 |
| Current portion of finance lease liabilities | 275 | 269 |
| Total current liabilities | 20,896 | 25,780 |
| Long-term notes payable, excluding current portion | 2,900 | — |
| Operating lease liabilities, excluding current portion | 1,576 | 2,582 |
| Other long-term liabilities | 1,390 | 1,404 |
| Finance lease liabilities, excluding current portion | 680 | 956 |
| Total liabilities | 27,442 | 30,722 |
| Commitments and contingencies (Note 12) | ||
| Shareholders’ equity: | ||
| Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding | — | — |
| Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,742,857 shares issued and 1,884,814 shares outstanding as of December 31, 2024 and 2,742,857 shares issued and 1,860,154 shares outstanding as of December 31, 2023 | — | — |
| Additional paid-in capital | 33,027 | 33,309 |
| Retained earnings (accumulated deficit) | 1,189 | (1,301) |
| Accumulated other comprehensive loss | (5,666) | (1,015) |
| Treasury stock, at average cost, 858,043 shares as of December 31, 2024 and 882,703 shares as of December 31, 2023 | (19,936) | (20,509) |
| Total shareholders’ equity | 8,614 | 10,484 |
| Total liabilities and shareholders’ equity | $36,056 | $41,206 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
| For the years ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Net sales | $117,866 | $131,955 |
| Cost of sales | 26,406 | 29,090 |
| Gross profit | 91,460 | 102,865 |
| Operating expenses: | ||
| Commissions and incentives | 48,309 | 53,588 |
| Selling and administrative expenses | 41,722 | 50,241 |
| Total operating expenses | 90,031 | 103,829 |
| Income (loss) from operations | 1,429 | (964) |
| Interest (expense) income, net | (279) | 4 |
| Other income (expense), net | 2,590 | (170) |
| Income (loss) before income taxes | 3,740 | (1,130) |
| Income tax provision | (1,250) | (1,109) |
| Net income (loss) | $2,490 | $(2,239) |
| Income (loss) per common share: | ||
| Basic | $1.32 | $(1.20) |
| Diluted | $1.32 | $(1.20) |
| Weighted-average common shares outstanding: | ||
| Basic | 1,885 | 1,866 |
| Diluted | 1,885 | 1,866 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the years ended December 31,
| 2024 | 2023 | |
|---|---|---|
| Net income (loss) | $2,490 | $(2,239) |
| Other comprehensive loss, net of tax: | ||
| Foreign currency translations loss | (4,653) | (819) |
| Pension obligations, net of tax provision of $1 and $6 in 2024 and 2023, respectively | 2 | 12 |
| Other comprehensive loss | $(4,651) | $(807) |
| Comprehensive loss | $(2,161) | $(3,046) |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(amounts in thousands, except share data)
| Common Stock, $0.0001 par value | |||||||
|---|---|---|---|---|---|---|---|
| Number of Shares | Amount | Additionalpaid incapital | Retained earnings (accumulated deficit) | Accumulatedothercomprehensive loss | Treasurystock | Totalshareholders’equity | |
| Balance at December 31, 2022 | 1,858,800 | $— | $33,377 | $1,686 | $(208) | $(20,679) | $14,176 |
| Net loss | — | — | — | (2,239) | — | — | (2,239) |
| Payment of cash dividends | — | — | — | (748) | — | — | (748) |
| Charge related to stock-based compensation | — | — | 43 | — | — | — | 43 |
| Issuance of unrestricted shares | 12,808 | — | (76) | — | — | 299 | 223 |
| Stock option exercises | 2,000 | — | (35) | — | — | 47 | 12 |
| Repurchase of common stock | (13,454) | — | — | — | — | (176) | (176) |
| Foreign currency translation | — | — | — | — | (819) | — | (819) |
| Pension obligations, net of $6 tax | — | — | — | — | 12 | — | 12 |
| Balance at December 31, 2023 | 1,860,154 | $— | $33,309 | $(1,301) | $(1,015) | $(20,509) | $10,484 |
| Net income | — | — | — | 2,490 | — | — | 2,490 |
| Charge related to stock-based compensation | — | — | 91 | — | — | — | 91 |
| Issuance of unrestricted shares | 24,660 | — | (373) | — | — | 573 | 200 |
| Foreign currency translation | — | — | — | — | (4,653) | — | (4,653) |
| Pension obligations, net of $1 tax | — | — | — | — | 2 | — | 2 |
| Balance at December 31, 2024 | 1,884,814 | $— | $33,027 | $1,189 | $(5,666) | $(19,936) | $8,614 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the years ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income (loss) | $2,490 | $(2,239) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 1,534 | 1,628 |
| Non-cash operating lease expense | 1,541 | 1,904 |
| Provision for inventory losses | 777 | 463 |
| (Recovery of) Provision for credit losses | (312) | 519 |
| Loss on disposal of assets | 2 | 7 |
| Gain on disposal of subsidiary | (228) | — |
| Unrealized loss (gain) from foreign exchange | (3,257) | — |
| Stock-based compensation expense | 291 | 278 |
| Deferred income taxes | (159) | 121 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 344 | (391) |
| Income tax receivable | (277) | (42) |
| Inventories | 2,474 | (272) |
| Prepaid expenses and other current assets | 2,094 | 1,354 |
| Deferred commissions | 859 | 346 |
| Other assets | 625 | (226) |
| Accounts payable | (1,857) | (351) |
| Accrued expenses and other long-term liabilities | (4,289) | (2,308) |
| Taxes payable | 451 | (1,760) |
| Commissions and incentives payable | 887 | (1,081) |
| Deferred revenue | (1,729) | (320) |
| Net cash provided by (used in) operating activities | 2,261 | (2,370) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Acquisition of property and equipment | (297) | (748) |
| Proceeds from sale of assets | 12 | 1 |
| Net cash used in investing activities | (285) | (747) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from stock options exercised | — | 12 |
| Repurchase of common stock | — | (176) |
| Payment of cash dividends | — | (748) |
| Proceeds from notes payable | 3,600 | — |
| Repayment of finance lease obligations and other financing obligations | (1,639) | (991) |
| Net cash provided by (used in) financing activities | 1,961 | (1,903) |
| Effect of currency exchange rate changes on cash and cash equivalents and restricted cash | (809) | (790) |
| Increase (decrease) in cash and cash equivalents and restricted cash | 3,128 | (5,810) |
| Cash and cash equivalents and restricted cash at the beginning of the year | 9,387 | 15,197 |
| Cash and cash equivalents and restricted cash at the end of the year | $12,515 | $9,387 |
| For the years ended December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
| Income taxes paid, net | $829 | $2,551 |
| Interest paid on finance leases and other financing obligations | $475 | $100 |
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
| Assets acquired through other financing arrangements | $446 | $739 |
| Operating lease right-of-use assets acquired in exchange for new operating lease liabilities | $347 | $305 |
| Finance lease right-of-use assets acquired in exchange for new finance lease liabilities | $— | $1,305 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.