MANNATECH INC
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
MTEX$8.11+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-26.
0001056358-25-000018
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001437749-26-012430
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 104 current paragraphs.
46 unchanged; 34 reworded; 23 added; 34 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Deferred Tax Asset (DTA) and Deferred Tax Liability (DTL) Recent Developments
Current report
The reported net loss for the year ended December 31, 2025, was significantly impacted by non-cash income tax charges totaling approximately $12.3 million, of which $11.5 million relates to deferred income tax expense. These charges are balance sheet adjustments and do not reflect operating cash outflows.
Current report
Long-Term Deferred Tax Assets—** $1.7 Million**
Current report
During the fourth quarter of 2025, the Company recorded an incremental allowance against a portion of its long-term deferred tax assets (DTA). The total amount of the incremental allowance recorded of approximately $1.7 million was charged to income tax expense. The incremental allowance was driven by a change in expected earnings mix across jurisdictions and decreased domestic earnings, which created significant uncertainty regarding the future realization of these deferred tax benefits. As of December 31, 2025, gross deferred tax assets were $11.1 million, against which the Company maintained a valuation allowance of $9.7 million, resulting in net deferred tax assets of $1.4 million, compared to a net deferred tax asset of $3.2 million as of December 31, 2024.
Current report
The Company's effective tax rate for the year ended December 31, 2025, was 426.6%, compared to 33.4% for the same period in 2024. The significant change in effective tax rate was primarily attributable to the valuation allowance recorded on deferred tax assets, driven by changes in the expected earnings mix between domestic and foreign jurisdictions and the relative impact of these items on decreased earnings and recognition of deferred tax liability on unremitted foreign earnings.
Current report
Recognition of Deferred Tax Liability on Unremitted Foreign Earnings—** $9.7 Million (ASC 740-30)**
Current report
The most significant non-cash tax charge for the year ended December 31, 2025, relates to the recognition of a deferred tax liability (DTL) of approximately $9.7 million under ASC 740-30, associated with the estimated tax cost of unremitted earnings of certain foreign subsidiaries. The DTL computation was performed across multiple foreign jurisdictions — including Japan, Republic of Korea, Denmark, Sweden, Ukraine, and Hong Kong — applying applicable blended tax rates and withholding rates to accumulated unremitted retained earnings.
Current report
The combined DTA allowance adjustment and DTL recorded resulted in an additional $11.5 million charge to deferred tax expense, bringing the total net deferred tax position from a net deferred tax asset of $1.8 million at December 31, 2024, to a net deferred tax liability of $9.7 million at December 31, 2025.
Current report
Management notes that the DTL recorded as of December 31,2025, reflects the Company's current assessment of the provision under ASC 740-30 with respect to undistributed earnings of foreign subsidiaries and does not represent a current cash tax obligation. The Company continues to evaluate available planning strategies and structural options to mitigate the long-term impact of its tax structure, including those related to intercompany balances and applicable tax treaties across its international subsidiary network.
Current report
** Associate Fees**
Current report
Associate fees for the year ended December 31, 2025 decreased by $0.1 million, or 20.0%, to $0.4 million, as compared to $0.5 million for the same period in 2024.
Current report
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN
Current report
Liquidity and Going Concern
Current report
In accordance with ASC 205-40,Presentation of Financial Statements—Going Concern, management evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued.
Current report
As of December 31, 2025, the Company had cash and cash equivalents of $6.2 million and working capital of $1.8 million, compared to cash and cash equivalents of $11.4 million and working capital of $5.2 million as of December 31, 2024. Cash and cash equivalents were $7.7 million and working capital was $1.9 million as of December 31, 2023. Management has considered these historical liquidity levels and trends, including fluctuations in working capital and cash balances, in evaluating the Company’s ability to meet its future obligations.
Current report
Management identified the following conditions that raised substantial doubt about the Company’s ability to continue as a going concern:
Current report
To address these conditions, management has implemented and/or plans to implement the following actions:
Current report
Additional Cost-Cutting measures effective March 31, 2026
Current report
Subsequent to December 31, 2025, and prior to the issuance of these financial statements, the Company implemented the following additional measures effective March 31, 2026:
Current report
Management has prepared cash flow projections that incorporate these plans, as well as historical liquidity trends, and reflect its best estimates of future operating performance and liquidity needs. While management plans to take appropriate actions to increase its liquidity, there can be no assurance that the Company will be successful in its efforts, and there can be no assurance that, assuming the Company is able to strengthen its cash position, it will achieve sufficient revenue or profitable operations to continue as a going concern.
Current report
In addition, while the Company continues to closely monitor the results of mitigating these plans, it is evaluating other options for external capital injection.
Current report
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Current report
During the year ended December 31, 2025, the Company modified its assertion regarding the indefinite reinvestment of certain foreign earnings, as part of its ongoing evaluation of liquidity needs, capital allocation priorities, and operational requirements. Any resulting deferred tax liabilities recorded in connection with this reassessment represent non-cash charges at the time of recognition and do not have an immediate impact on cash flows from operations. Cash tax payments associated with such amounts would only be incurred upon the future repatriation of foreign earnings or as the underlying temporary differences reverse. The Company will continue to evaluate its assertion based on changes in facts and circumstances, and any updates will be reflected in the financial statements in the period in which they occur, in accordance with applicable guidance under ASC 740.
Removed paragraphs (34)
Previous report
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
RESULTS OF OPERATIONS
Previous report
Pack Sales and Associate Fees
Previous report
Pack sales and associate fees for the year ended December 31, 2024 decreased by $1.5 million, or 26.8%, to $4.1 million, as compared to $5.6 million for the same period in 2023. On a constant dollar basis, pack sales and associate fees in 2024 decreased $1.3 million, or 23.2%, as compared to 2023. The decrease in pack sales and associate fees in 2024 reflects a 3.7% decrease in the number of orders processed and a 24.2% decrease in the average order value of $49, as compared to $65 for the same period in 2023.
Previous report
•the timing of the introduction of new products and incentives;
Previous report
•our ability to attract and retain associates and preferred customers;
Previous report
•the timing of our incentives and contests;
Previous report
•the general overall economic outlook;
Previous report
•government regulations;
Previous report
•the perception and acceptance of network marketing;
Previous report
•the consumer perception of our products and overall operations; and
Previous report
•cultural events and vacation patterns (for example, most Asian markets celebrate their respective local New Year in the first quarter, which generally has a negative effect on that quarter).
Previous report
LIQUIDITY AND CAPITAL RESOURCES
Previous report
General Liquidity and Cash Flows
Previous report
Short Term Liquidity
Previous report
As of December 31, 2024 and 2023, our cash and cash equivalents totaled $11.4 million and $7.7 million, respectively. We believe our existing liquidity and cash flows from operations are adequate to fund our normal expected future business operations for the next twelve months.
Previous report
On April 23, 2024, the Company entered into unsecured Loan and Promissory Note agreements with three related
Previous report
parties, who are members of the Company’s Board of Directors, and who are current stockholders of the Company, in an
Previous report
aggregate principal amount of $3.6 million (see Note 10, Notes Payable). The purpose of the borrowing was to provide funds to the Company for general working capital needs, including payment to vendors, expansion of the Company’s non-US operations, technology investment primarily for improving the customer ordering process and software updates to improve visibility of sales associate activity.
Previous report
We have contractual purchase commitments with certain raw material suppliers to purchase minimum quantities. At December 31, 2024, we have one supply agreement which was amended on April 18, 2024, that requires the Company to purchase an aggregate of $1.1 million through 2025, with no purchase commitments thereafter. We also maintain other supply agreements and manufacturing agreements to protect our products, regulate product costs, and help ensure quality control standards. These agreements do not require us to purchaseany minimum quantities.
Previous report
We have operating lease liabilities for the property and equipment we use in our business operations. These operating lease liabilities represent our minimum future payment obligations on operating leases, including imputed interest. At December 31, 2024, our operating lease liabilities were $2.8 million, of which $1.2 million is presented as the current portion and $1.6 million is presented as Operating lease liabilities excluding current portion on our Consolidated Balance Sheets. We also have finance lease liabilities of $1.0 million and lease restoration liabilities of $0.3 million.
Previous report
As our primary source of liquidity has historically been our cash flows from operations, our liquidity is dependent on our ability to maintain and/or continue to improve revenue as compared to our operational expenses. In this regard, our management has established a 2024 business reorganization plan focusing on revenue growth, margin improvement and cost control and reduction, including a plan to improve margin through a price increase, continued focus on supply chain costs, and certain compensation plan adjustments, as well as to reorganize certain functional operations and reduce our fixed selling and administrative overhead.
Previous report
However, if our reorganization plans are not successful, or if we experience further or unexpected disruption in our
Previous report
We are a multinational company operating in numerous tax jurisdictions. We are currently not engaged in any tax related audits. For more information see Note 1, Organization and Summary of Significant Accounting Policies, Note 7, Income Taxes, Note 12, Commitments and Contingencies, and Note 13, Litigationto our Consolidated Financial Statements.
Previous report
Revenue Recognition
Previous report
Our revenue is derived from sales of individual products and associate fees or, in certain geographic markets, starter packs. Substantially all of our product and pack sales are to associates and preferred customers at published wholesale prices. We record revenue net of any sales taxes and record a reserve for expected sales returns based on historical experience. We recognize revenue from shipped packs and products upon receipt by the customer. During the quarter ended September 30, 2024 the Company changed its shipping terms with customers such that ownership transfers upon delivery to the freight carrier, satisfying the Company's performance obligation. Previously, the Company's shipping terms were Free on Board ("FOB") destination, so the Company recognized revenue upon delivery of the product to the customer and we recorded the value of orders shipped but not yet delivered to customers as Deferred Revenue on our Consolidated Balance Sheets. Corporate-sponsored event revenue is recognized when the event is held.
Previous report
Orders placed by associates or preferred customers constitute our contracts with customers. Product sales placed in the form of an automatic order contain two performance obligations: (a) the sale of the product and (b) the loyalty program. The Company's customer loyalty program conveys a material right to the customer to redeem loyalty points for the purchase of products. For these contracts, the Company accounts for each of these obligations separately as they are each distinct. The transaction price is allocated between the product sale and the loyalty program on a relative standalone selling price basis. Sales placed through a one-time order contain only the first performance obligation noted above - the delivery of the product.
Previous report
The Company provides associates with access to a complimentary three-month package for the Success TrackerTM and Mannatech+ online business tools with the first payment of an associate fee. The first payment of an associate fee contains three performance obligations: (a) the associate fee, whereby the Company provides an associate with the right to earn commissions, bonuses and incentives for a year, (b) three months of complimentary access to utilize the Success Tracker™ online tool and (c) three months of complimentary access to utilize the Mannatech+ online business tool. The transaction price is allocated between the three performance obligations on a relative standalone selling price basis and revenue is recognized over the period that access to the tool is active. Associates do not have complimentary access to online business tools after the first contractual period.
Previous report
With regard to both of the aforementioned contracts, the Company determines the standalone selling prices by using observable inputs which includes the Company’s standard published price lists.
Previous report
Product Return Policy
Previous report
We stand behind our products and believe we offer a reasonable and industry-standard product return policy to all of our customers. We do not resell returned products. Refunds are not processed until proper approval is obtained. Refunds are processed and returned in the same form of payment that was originally used in the sale. Each country in which we operate has specific product return guidelines. However, we allow our associates and preferred customers to exchange products as long as the products are unopened and in good condition. Our return policies for our retail customers and our associates and preferred customers are as follows:
Previous report
•Retail Customer Product Return Policy. This policy allows a retail customer to return any of our products to the original associate who sold the product and receive a full cash refund from the associate for the first 180 days following the product’s purchase if located in the United States and Canada, and for the first 90 days following the product’s purchase in other countries where we sell our products. The associate may return or exchange the product based on the associate product return policy. In China, where we sell our products under a cross-border e-commerce model, we have a 14-day return policy.
Previous report
•Associate and Preferred Customer Product Return Policy. This policy allows the associate or preferred customer to return an order within one year of the purchase date upon voluntarily terminating his/her account. If an associate or preferred customer returns a product unopened and in good condition, he/she may receive a full refund minus any shipping cost, if applicable. We may also allow the associate or preferred customer to receive a full satisfaction guarantee refund if they have tried the product and are not satisfied for any reason, excluding promotional materials. This satisfaction guarantee refund applies in the United States and Canada, only for the first 180 days following the product’s purchase and applies in other countries where we sell our products for the first 90 days following the product’s purchase; however, any commissions earned by an associate will be deducted from the refund. If we discover abuse of the refund policy, we may terminate the associate's or preferred customer's account.
Previous report
The Company utilizes the expected value method, as set forth by ASC Topic 606, to estimate the sales returns and allowance liability by taking the weighted average of the sales return rates over a rolling six-month period. The Company allocates the total amount recorded within the sales return and allowance liability as a reduction of the overall transaction price for the Company’s product sales. The Company deems the sales refund and allowance liability to be a variable consideration. The method for estimating the sales returns and allowance liability has remained consistent as a result of adopting ASC Topic 606.
Reworded paragraphs (34)
Previous wording
The following discussion is intended to assist in the understanding of our consolidated financial position and our results of operations for each of years ended December 31, 2024 and 2023. This discussion should be read in conjunction with “Item 15.1 – Consolidated Financial Statements” beginning on page F-1 of this report and with other financial information included elsewhere in this report. Unless stated otherwise, all financial information presented below, throughout this report, and in the consolidated financial statements and related notes includes Mannatech and all of our subsidiaries on a consolidated basis. Refer to the Non-GAAP Financial Measure section herein for a description of how Constant dollar (“Constant dollar”) growth rate (a Non-GAAP financial metric) is determined.
Current wording
The following discussion is intended to assist in the understanding of our consolidated financial position and our results of operations for each of years ended December 31, 2025 and 2024. This discussion should be read in conjunction with “Item 15.1 – Consolidated Financial Statements” beginning on page F-1 of this report and with other financial information included elsewhere in this report. Unless stated otherwise, all financial information presented below, throughout this report, and in the consolidated financial statements and related notes includes Mannatech and all of our subsidiaries on a consolidated basis. Refer to theNon-GAAP Financial Measure section herein for a description of how Constant dollar (“Constant dollar”) growth rate (a Non-GAAP financial metric) is determined.
Previous wording
Mannatech is a global wellness solution provider, which was incorporated and began operations in November 1993. We develop and sell innovative, high quality, proprietary nutritional supplements, skin care and anti-aging products, and weight-management products that target optimal health and wellness. We currently sell our products in three regions: (i) the Americas (the United States, Canada and Mexico); (ii) Europe/the Middle East/Africa (“EMEA”) (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom); and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Thailand, Taiwan, Hong Kong, and China). We also ship our products to customers in the following countries: Belgium, France, Greece, Italy, Luxembourg, and Poland. During the second quarter of 2024, the Company liquidated its entity in Sweden, Mannatech Sverige AB.
Current wording
Mannatech is a global wellness solution provider, which was incorporated and began operations in November 1993. We develop and sell innovative, high quality, proprietary nutritional supplements, skin care and anti-aging products, and weight-management products that target optimal health and wellness. We currently sell our products in three regions: (i) the Americas (the United States, Canada and Mexico); (ii) Europe/the Middle East/Africa (“EMEA”) (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom); and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Thailand, Taiwan, Hong Kong, and China). We also ship our products to customers in the following countries: Belgium, France, Greece, Italy, Luxembourg, and Poland. During 2025, the Company liquidated its entity in Denmark, Mannatech Denmark ApS.
Previous wording
We conduct our business as a single operating segment and primarily sell our products through a network of approximately 133,000 active associates and preferred customer positions held by individuals that purchased our products and/or packs or paid associate fees during the last twelve months, who we refer to ascurrent associates and preferred customers. New pack sales and the receipt of new associate fees in connection with new positions in our network are leading indicators for the long-term success of our business. New associate or preferred customer positions are created in our network when our associate fees are paid, or packs and products are purchased for the first time under a new account. We review and analyze net sales by geographical location and by packs and products on a consolidated basis. Each of our subsidiaries sells similar products and exhibits similar economic characteristics, such as selling prices and gross margins.
Current wording
We conduct our business as a single operating segment and primarily sell our products through a network of approximately 114,000 active associates and preferred customer positions held by individuals that purchased our products and/or paid associate fees during the last twelve months, who we refer to ascurrent associates and preferred customers. New associate fees in connection with new positions in our network are leading indicators for the long-term success of our business. New associate or preferred customer positions are created in our network when our associate fees are paid and/or products are purchased for the first time under a new account. We review and analyze net sales by geographical location and by products on a consolidated basis. Each of our subsidiaries sells similar products and exhibits similar economic characteristics, such as selling prices and gross margins.
Previous wording
Consolidated net sales for the year ended December 31, 2024 was$117.9 million, as compared to$132.0 million for the year ended December 31, 2023. Net sales decreased $14.1 million, or 10.7%, for 2024, as compared to 2023. Our 2024 net sales declined $11.4 million, or 8.6%, on a Constant dollar basis (see Non-GAAP Financial Measures, below), and unfavorable foreign exchange caused a $2.7 million decrease in GAAP net sales as compared to 2023.
Current wording
Consolidated net sales for the year ended December 31, 2025 was $108.0 million, as compared to $117.9 million for the year ended December 31, 2024. Net sales decreased $9.9 million, or 8.3%, for 2025, as compared to 2024. Our 2025 net sales declined $8.0 million, or 6.8%, on a Constant dollar basis (see Non-GAAP Financial Measures, below), and unfavorable foreign exchange caused a $1.9 million decrease in GAAP net sales as compared to 2024.
Previous wording
We generated operating income of$1.4 million for the year ended December 31, 2024, as compared to an operating loss of $1.0 million for the same period last year. Our 2024 operating income, on a Constant dollar basis (see Non-GAAP Financial Measures, below), was $2.2 million.
Current wording
We incurred an operating loss of $0.4 million for the year ended December 31, 2025, as compared to operating income of $1.4 million for the same period last year. Our 2025 operating income, on a Constant dollar basis (see Non-GAAP Financial Measures, below), was $0.1 million. Our 2024 operating income, on a Constant dollar basis (see Non-GAAP Financial Measures, below), was $2.2 million.
Previous wording
On a consolidated basis, the strength of the U.S. dollar against the Korean Won during 2024, provided a foreign currency gain of $2.6 million in other income. This resulted in net income of $2.5 million, or $1.32 per diluted share, for the year ended December 31, 2024, as compared to a net loss of $2.2 million, or $1.20 per diluted share for the year ended December 31, 2023.
Current wording
Net loss was $15.2 million, or $8.00 per diluted share, for the year ended December 31, 2025, as compared to net income of $2.5 million, or $1.32 per diluted share for the year ended December 31, 2024.
Previous wording
To supplement our financial results presented in accordance with generally accepted accounting principles in the United States ("GAAP"), the table below summarizes operating results that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, including changes in: Net Sales, Gross Profit, and Income (Loss) from Operations. We refer to these adjusted financial measures as Constant dollar items, which are Non-GAAP financial measures. We believe these measures provide investors an additional perspective on trends and our operating results. To exclude the impact of changes due to the translation of foreign currencies into U.S. dollars in the current year, we calculate current year results at a constant exchange rate utilizing the prior year’s rate. Currency impact is determined as the difference between the actual GAAP results and the recalculated results for the current year at the constant dollar rates
Current wording
To supplement our financial results presented in accordance with generally accepted accounting principles in the United States ("GAAP"), the table below summarizes operating results that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, including changes in: Net Sales, Gross Profit, and (Loss) Income from Operations. We refer to these adjusted financial measures as Constant dollar items, which are Non-GAAP financial measures. We believe these measures provide investors an additional perspective on trends and our operating results. To exclude the impact of changes due to the translation of foreign currencies into U.S. dollars in the current year, we calculate current year results at a constant exchange rate utilizing the prior year’s rate. Currency impact is determined as the difference between the actual GAAP results and the recalculated results for the current year at the constant dollar rates.
Previous wording
At December 31, 2024, our net sales declined $11.4 million, or 8.6% on a Constant dollar basis (see reconciliation of Non-GAAP Financial Measures in the table below); unfavorable foreign exchange caused a $2.7 million decrease in GAAP net sales as compared to the same period in 2023.
Current wording
At December 31, 2025, our net sales declined $8.0 million, or 6.8% on a Constant dollar basis (see reconciliation of Non-GAAP Financial Measures in the table below); unfavorable foreign exchange caused a $1.9 million decrease in GAAP net sales as compared to the same period in 2024.
Previous wording
For the years ended December 31, 2024, our operations outside of the Americas accounted for 66.3% of our consolidated net sales, as compared to 67.6% in 2023.
Current wording
For the year ended December 31, 2025, our operations outside of the Americas accounted for 69.9% of our consolidated net sales, as compared to 66.3% in 2024.
Previous wording
Sales for the Americas decreased by $3.1 million, or 7.2%, to $39.7 million for 2024 as compared to $42.8 million for the same period in 2023. This decrease was primarily due to a 8.6% decline in the number of active independent associates andpreferred customers, which was partially offset by a 1.5% increase in revenue per active independent associate and preferred customer. Sales in the Americas includes the Mexico region. As a result of the weakening of the Mexican Peso in 2024, foreign currency exchange had the effect of decreasing revenue by $0.1 million for the year ended December 31, 2024, as compared to the same period in 2023.
Current wording
Sales for the Americas decreased by $7.2 million, or 18.1%, to $32.5 million for 2025 as compared to $39.7 million for the same period in 2024. This decrease was primarily due to a 12.9% decline in the number of active independent associates and preferred customers and a 4.0% decrease in revenue per active independent associate and preferred customer. Sales in the Americas includes the Mexico region. As a result of the weakening of the Mexican Peso in 2025, foreign currency exchange had the effect of decreasing revenue by $0.3 million for the year ended December 31, 2025, as compared to the same period in 2024.
Previous wording
During 2024, Asia/Pacific sales decreased by $10.4 million, or 13.1%, to $69.0 million as compared to $79.4 million for 2023. Foreign currency exchange had the effect of decreasing revenue in 2024 by $2.7 million, as compared to the same period in 2023. The currency impact is primarily due to the weakening of the Korean Won and Japanese Yen. In addition, net sales in the Asia/Pacific region was negatively impacted by a 4.5% decrease in revenue per active independent associate and preferred customer. The number of active independent associates and preferred customers in the Asia/Pacific region decreased 9.0%in 2024 as compared to 2023.
Current wording
During 2025, Asia/Pacific sales decreased by $2.6 million, or 3.8%, to $66.4 million as compared to $69.0 million for 2024. Foreign currency exchange had the effect of decreasing revenue in 2025 by $1.8 million, as compared to the same period in 2024. The currency impact is primarily due to the weakening of the Korean Won. In addition, net sales in the Asia/Pacific region was negatively impacted by a 13.9% decrease in the number of active independent associates and preferred customers, which was partially offset by a 17.0% increase in revenue per active independent associate and preferred customer.
Previous wording
For the year ended December 31, 2024, EMEA sales decreased by $0.6 million, or 6.1%, to $9.2 million as compared to $9.8 million for 2023. This decrease was primarily due to a 6.9% decrease in the number of active independent associates and preferred customers, which was partially offset by a 0.9% increase in revenue per active independent associate and preferred customer. Foreign currency exchange had the effect of increasing revenue by $0.1 million for the year ended December 31, 2024, as compared to the same period in 2023. The currency impact is primarily due to the strengthening of the South African Rand and British Pound.
Current wording
For the year ended December 31, 2025, EMEA sales decreased by $0.1 million, or 1.1%, to $9.1 million as compared to $9.2 million for 2024. This decrease was primarily due to a 3.8% decrease in the number of active independent associates and preferred customers, which was partially offset by a 0.4% increase in revenue per active independent associate and preferred customer. Foreign currency exchange had the effect of increasing revenue by $0.2 million for the year ended December 31, 2025, as compared to the same period in 2024. The currency impact is primarily due to the strengthening of the South African Rand.
Previous wording
Our product sales consist primarily of sales made to our independent associates and preferred customers at published wholesale prices. Product sales for the year ended December 31, 2024 decreased by $13.0 million, or 10.4%, to $112.3 million, as compared to $125.3 million for the same period in 2023. On a constant dollar basis, product sales in 2024 decreased $10.5 million, or 8.4%, as compared to 2023. The decrease in product sales in 2024 reflects a 7.2% decrease in the number of orders processed and a decrease in the average order value of $172, as compared to $180 for the same period in 2023.
Current wording
Our product sales consist primarily of sales made to our independent associates and preferred customers at published wholesale prices. Product sales for the year ended December 31, 2025 decreased by $9.9 million, or 8.5%, to $106.0 million, as compared to $115.9 million for the same period in 2024. On a constant dollar basis, product sales in 2025 decreased $1.9 million, or 1.8%, as compared to 2024. The decrease in product sales in 2025 reflects a 3.8% decrease in the number of orders processed and a decrease in the average order value of $166.0, as compared to $172.0 for the same period in 2024.
Previous wording
The approximate number of active new and continuing active associates and preferred customers who purchased our products or packs or paid associate fees during the twelve months ended December 31 was as follows:
Current wording
The approximate number of active new and continuing active associates and preferred customers who purchased our products and/or paid associate fees during the years ended December 31 was as follows:
Previous wording
The Company collects associate fees in lieu of selling packs in certain markets. Associate fees are paid annually by new and continuing associates to the Company, which entitle them to earn commissions and incentives for that year. The Company collected associate fees in lieu of pack sales within the United States, Canada, South Africa, Japan, Australia, New Zealand, Singapore, Hong Kong, Taiwan, Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, the Netherlands, Norway, Spain, Sweden and the United Kingdom.
Current wording
The Company collects associate fees in certain markets. Associate fees are paid annually by new and continuing associates to the Company, which entitle them to earn commissions and incentives for that year. The Company collected associate fees within the United States, Canada, South Africa, Japan, Australia, New Zealand, Singapore, Hong Kong, Taiwan, Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, the Netherlands, Norway, Spain, Sweden and the United Kingdom.
Previous wording
In the Republic of Korea and Mexico, packs may still be purchased by our associates who wish to build a Mannatech business. These packs contain products that are discounted from both the published retail and associate prices. There are several pack options available to our associates. Pack sales may be completed during the final stages of the registration process, entitling the Associates to earn commissions and incentives for that year. These packs can provide new associates with valuable training and promotional materials, as well as products for resale to retail customers, demonstration purposes, and personal consumption. Business-building associates in these markets can also purchase an upgrade pack, which provides the associate with additional promotional materials. We also do not collect associate fees or sell packs in our non-direct selling business in mainland China.
Current wording
In the Republic of Korea and Mexico, packs may still be purchased by our associates who wish to build a Mannatech business, but associate fees are not sold as a standalone item. These packs contain products that are discounted from both the published retail and associate prices. There are several pack options available to our associates. In certain of these markets, pack sales are completed during the final stages of the registration process, entitling the Associates to earn commissions and incentives for that year. These packs can provide new associates with valuable training and promotional materials, as well as products for resale to retail customers, demonstration purposes, and personal consumption. Business-building associates in these markets can also purchase an upgrade pack, which provides the associate with additional promotional materials.
Previous wording
Other sales consisted of: (i) sales of promotional materials; (ii) monthly fees collected for the Success Tracker™ and Mannatech+ customized electronic business-building and educational materials, databases and applications; (iii) training and event registration fees; and (iv) a reserve for estimated sales refunds and returns. Promotional materials, training, database applications and business management tools are utilized to support our independent associates, which in turn helps stimulate product sales.
Current wording
Other sales consisted of: (i) sales of promotional materials; (ii) monthly fees collected for the Success Tracker™ and Mannatech+ customized electronic business-building and educational materials, databases and applications; and (iii) training and event registration fees. Promotional materials, training, database applications and business management tools are utilized to support our independent associates, which in turn helps stimulate product sales.
Previous wording
For the years ended December 31, 2024 and 2023, other sales were $1.5 million and $1.1 million, respectively.
Current wording
For the years ended December 31, 2025 and 2024, other sales were $1.6 million and $1.5 million, respectively.
Previous wording
For the year ended December 31, 2024, gross profit decreased by $11.4 million, or 11.1%, to $91.5 million, as compared to $102.9 million for the same period in 2023. The decrease in gross profit in dollar terms is principally due to the decline in sales. Gross profit as a percentage of net sales decreased to 77.6% for 2024, as compared to 78.0% for 2023, largely due to increased costs related to supply chain challenges, including increased product costs and increased freight costs.
Current wording
For the year ended December 31, 2025, gross profit decreased by $10.5 million, or 11.5%, to $81.0 million, as compared to $91.5 million for the same period in 2024. The decrease in gross profit in dollar terms is principally due to the decline in sales. Gross profit as a percentage of net sales decreased to 74.9% for 2025, as compared to 77.6% for 2024, largely due to increased costs related to supply chain challenges, including increased product costs and increased freight costs.
Previous wording
Commission expenses decreased $4.8 million, or 9.4%, to $46.2 million, for the year ended December 31, 2024, as compared to $51.0 million for the same period in 2023. Commissions are earned on sales. Commission expense in dollar terms decreased in 2024 primarily due to a decline in our sales in the year. Commissions as a percentage of net sales was 39.2% for the year ended December 31, 2024 and 38.6% for the same period in the prior year.
Current wording
Commission expenses decreased $5.6 million, or 12.1%, to $40.6 million, for the year ended December 31, 2025, as compared to $46.2 million for the same period in 2024. Commissions are earned on sales. Commission expense in dollar terms decreased in 2025 primarily due to a decline in our sales in the year. Commissions as a percentage of net sales was 37.6% for the year ended December 31, 2025 and 39.2% for the same period in the prior year.
Previous wording
Incentive costs decreased for the year ended December 31, 2024 by 19.2%, or $0.5 million, to $2.1 million as compared to $2.6 million for the same period in 2023. The decrease was related to travel incentives in the Americas and Asia/Pacific. The costs of incentives, as a percentage of net sales, decreased to 1.8% for the year ended December 31, 2024, as compared to 2.0% for the same period in 2023.
Current wording
Incentive costs decreased for the year ended December 31, 2025 by 47.6%, or $1.0 million, to $1.1 million as compared to $2.1 million for the same period in 2024. The decrease was related to travel incentives in the Americas and Asia/Pacific. The costs of incentives, as a percentage of net sales, decreased to 1.1% for the year ended December 31, 2025, as compared to 1.8% for the same period in 2024.
Previous wording
For the years ended December 31, 2024 and 2023, overall selling and administrative expenses were $41.7 million and $50.2 million, respectively. The decrease of $8.5 million primarily includes a $3.2 million decrease in payroll related costs, $1.6 million decrease in legal and consulting fees, $1.5 million decrease in marketing costs, $0.6 million decrease in miscellaneous operating expenses, $0.5 million decrease in travel and entertainment costs, $0.5 million decrease in office expenses, $0.4 million decrease in credit card fees and a $0.2 million decrease in contract labor costs.
Current wording
For the years ended December 31, 2025 and 2024, overall selling and administrative expenses were $39.6 million and $41.7 million, respectively. The decrease of $2.1 million primarily includes a $1.6 million decrease in payroll related costs, a $0.6 million decrease in warehouse costs, a $0.1 million decrease in travel and entertainment costs, a $0.1 million decrease in charitable contributions, a $0.1 million decrease in miscellaneous administrative expenses, which was offset by a $0.4 million increase in marketing costs.
Previous wording
At December 31, 2024 and 2023, depreciation and amortization expense was $1.5 million and $1.6 million, respectively.
Current wording
At December 31, 2025 and 2024, depreciation and amortization expense was $1.1 million and $1.5 million, respectively.
Previous wording
Primarily due to foreign exchange gains, other income was $2.6 million for the year ended December 31, 2024. At December 31, 2023, other expense was $0.2 million, primarily due to foreign exchange losses.
Current wording
Primarily due to foreign exchange losses, other expense was $2.1 million for the year ended December 31, 2025. At December 31, 2024, other income was $2.6 million, primarily due to foreign exchange gains.
Previous wording
For the years ended December 31, 2024 and 2023, the Company’s effective tax rate was 33.4% and (98.1)%, respectively. In 2024 and 2023, the Company’s effective tax rate differed from the statutory rate due to the mix of earnings across jurisdictions and the associated valuation allowances recorded on losses in certain jurisdictions.
Current wording
For the years ended December 31, 2025 and 2024, the Company’s effective tax rate was 426.6% and 33.4%, respectively. In 2025 and 2024, the Company’s effective tax rate differed from the statutory rate due to the mix of earnings across jurisdictions and the associated valuation allowances recorded on losses in certain jurisdictions, as well as the deferred tax liability recorded for unremitted earnings of certain foreign subsidiaries. The Company recording a valuation allowance on deferred tax assets was largely driven by changes in earnings mix between jurisdictions, and the relative impact of these items on decreased earnings.
Previous wording
We believe the impact of seasonality on our consolidated results of operations is minimal. We have experienced and believe we will continue to experience variations on our quarterly results of operations in response to, among other things:
Current wording
There are variations in the activity of our associates and customers in many of our markets in the first and fourth quarters attributable to events such as Christmas and Lunar New Year. We have experienced and believe we will continue to experience variations on our quarterly results of operations in response to, among other things:
Previous wording
Cash and cash equivalents was $11.4 million at December 31, 2024, as compared to $7.7 million as of December 31, 2023. The Company is required to restrict cash for (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) Australia building lease collateral. The current portion of restricted cash was $0.6 million and$0.9 millionat December 31, 2024 and 2023, respectively. The long-term portion of restricted cash was$0.6 million and $0.7 million at December 31, 2024 and 2023, respectively. Fluctuations in currency rates produced a decrease of $0.8 million in cash and cash equivalents in 2024.
Current wording
Cash and cash equivalents was $6.2 million at December 31, 2025, as compared to $11.4 million as of December 31, 2024. The Company is required to restrict cash for (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserve on credit card sales in the United States and Canada; and (iii) Australia building lease collateral. The current portion of restricted cash was $0.6 million at each of December 31, 2025 and 2024, respectively. The long-term portion of restricted cash was $0.2 million and $0.6 million at December 31, 2025 and 2024, respectively. Fluctuations in currency rates resulted in a decrease of $0.7 million in cash and cash equivalents in 2025.
Previous wording
Working capital represents total current assets less total current liabilities. At December 31, 2024, our working capital was $5.2 million as compared to $1.9 million at December 31, 2023. The increase in working capital principally reflects the increase in our cash balance which was utilized to fund our operations in 2024, as well as pay down our current liabilities and fund financing activities.
Current wording
Working capital represents total current assets less total current liabilities. At December 31, 2025, our working capital was $1.8 million as compared to $5.2 million at December 31, 2024. The decrease in working capital principally reflects the decrease in our cash balance, which was utilized to fund our operations in 2025, as well as pay down our current liabilities and fund financing activities.
Previous wording
Cash provided in operating activities was $2.3 million for the year ended December 31, 2024, as compared to a use of cash of $2.4 million in the prior year. The primary factors driving the improvement in cash flow from operating activities were net income of $2.5 million compared to a net loss of $2.2 million and an Unrealized FX gain of $3.3 million compared to $0 for the years ended December 31, 2024 and 2023, respectively.
Current wording
Cash used in operating activities was $3.0 million for the year ended December 31, 2025, as compared to cash provided of $2.3 million in the prior year. The primary factors driving the decline in cash flow from operating activities were net loss of $15.2 million compared to net income of $2.5 million and an unrealized foreign currency loss of $1.6 million compared to an unrealized foreign currency gain of $3.3 million for the years ended December 31, 2025 and 2024, respectively.
Previous wording
For the years ended December 31, 2024 and 2023, we invested $0.3 million and $0.7 million, respectively. During the years ended December 31, 2024 and 2023, we invested approximately $0.3 million and $0.7 million in back-office software projects and equipment, reported as property and equipment, respectively.
Current wording
For the years ended December 31, 2025 and 2024, we invested approximately $1.4 million and $0.3 million in back-office software projects and equipment, reported as property and equipment, respectively.
Previous wording
For the year ended December 31, 2024, our financing activities provided cash of $2.0 million as compared to a use of cash of $1.9 million for the same period of 2023. During 2024, we received $3.6 million from the issuance of notes payable (see Note 10, Notes Payable)and we used $1.6 million in the repayment of finance lease obligations. For the year ended December 31, 2023, we used approximately $1.0 million in the repayment of finance lease obligations and other long-term liabilities, $0.7 million in the payment of dividends to shareholders, and $0.2 million for the repurchase of common stock.
Current wording
For the year ended December 31, 2025, our financing activities used cash of $0.5 million as compared to cash provided of $2.0 million for the same period of 2024. During 2025, we used $0.3 million in the repayment of finance lease obligations and $0.2 million in the repayment of notes payable. For the year ended December 31, 2024, we received $3.6 million from the issuance of notes payable (see Note 11,*Notes Payable)*and we used $1.6 million in the repayment of finance lease obligations and other long-term liabilities.
Previous wording
Inventory consists of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or net realizable value. We record the amounts charged by the vendors as the costs of inventory. Typically, the net realizable value of our inventory is higher than the aggregate cost. Determination of net realizable value can be complex and, therefore, requires a high degree of judgment. In order for management to make the appropriate determination of net realizable value, the following items are considered: inventory turnover statistics, current selling prices, seasonality factors, consumer demand, regulatory changes, competitive pricing, and performance of similar products. If we determine the carrying value of inventory is in excess of estimated net realizable value, we write down the value of inventory to the estimated net realizable value.
Current wording
Inventory consists of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or net realizable value. We record the amounts charged by the vendors as the costs of inventory. Typically, the net realizable value of our inventory is higher than the aggregate cost. Determination of net realizable value can be complex and, therefore, requires a high degree of judgment. In order for management to make the appropriate determination of net realizable value, the following items are considered: inventory turnover statistics, current selling prices, consumer demand, regulatory changes, competitive pricing, and performance of similar products. If we determine the carrying value of inventory is in excess of estimated net realizable value, we write down the value of inventory to the estimated net realizable value.
Previous wording
We also review inventory for obsolescence in a similar manner and any inventory identified as obsolete is reserved or written off. Our determination of obsolescence is based on assumptions about the demand for our products, product expiration dates, estimated future sales, and general future plans. We monitor actual sales compared to original projections, and if actual sales are less favorable than those originally projected by us, we record an additional inventory reserve or write-down. Historically, our estimates have been close to our actual reported amounts. However, if our estimates regarding inventory obsolescence are inaccurate or consumer demand for our products changes in an unforeseen manner, we may be exposed to additional material losses or gains in excess of our established estimated inventory reserves. At December 31, 2024 and 2023, our inventory reserves were$0.6 million and$0.4 million, respectively.
Current wording
We also review inventory for obsolescence in a similar manner and any inventory identified as obsolete is reserved or written off. Our determination of obsolescence is based on assumptions about the demand for our products, product expiration dates, estimated future sales, and general future plans. We monitor actual sales compared to original projections, and if actual sales are less favorable than those originally projected by us, we record an additional inventory reserve or write-down. Historically, our estimates have been close to our actual reported amounts. However, if our estimates regarding inventory obsolescence are inaccurate or consumer demand for our products changes in an unforeseen manner, we may be exposed to additional material losses or gains in excess of our established estimated inventory reserves. At December 31, 2025 and 2024, our inventory reserves were $0.1 million and $0.6 million, respectively.
Previous wording
We review the estimates and assumptions used in evaluating the probability of realizing the future benefits of our deferred tax assets and record a valuation allowance when we believe that a portion or all of the deferred tax assets may not be realized. If we are unable to realize the expected future benefits of our deferred tax assets, we are required to provide a valuation allowance. We use our past history and experience, overall profitability, future management plans, and current economic information to evaluate the amount of valuation allowance to record. As of December 31, 2024, we maintained a valuation allowance for deferred tax assets arising from our operations of$6.9 million because they did not meet the “more likely than not” criteria as defined by the recognition and measurement provisions of FASB ASC Topic 740, Income Taxes. In addition, as of December 31, 2024, we had net deferred tax assets, after valuation allowance and deferred tax liabilities, totaling$1.8 million, which may not be realized if our assumptions and estimates change, which would affect our effective income tax rate and cash flows in the period of discovery or resolution.
Current wording
We review the estimates and assumptions used in evaluating the probability of realizing the future benefits of our deferred tax assets and record a valuation allowance when we believe that a portion or all of the deferred tax assets may not be realized. If we are unable to realize the expected future benefits of our deferred tax assets, we are required to provide a valuation allowance. We use our past history and experience, overall profitability, future management plans, and current economic information to evaluate the amount of valuation allowance to record. As of December 31, 2025, we maintained a valuation allowance of $9.7 million against our gross deferred tax assets of $11.1 million, as these assets did not meet the “more likely than not” criteria for realization as defined by the recognition and measurement provisions of FASB ASC Topic 740, Income Taxes. The increase in the valuation allowance during the year ended December 31, 2025, was driven primarily by a change in the expected earnings mix between domestic and foreign jurisdictions and decreased domestic profitability, which resulted in significant uncertainty regarding the future realization of deferred tax assets. Accordingly, the Company recorded an incremental valuation allowance against a portion of its long-term deferred tax assets, resulting in a non-cash charge of approximately $1.7 million. Net deferred tax assets decreased to $1.4 million as of December 31, 2025, from $3.2 million as of December 31, 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We also do not collect associate fees or sell packs in our non-direct selling business in mainland China.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
supply chain, and/or potential decreases in consumer demands, our sales and our overall liquidity in the next twelve months could be negatively impacted. If our existing capital resources or cash flows become insufficient to meet current business plans, projections, and existing capital requirements, we may be required to raise additional funds, which may not be available on favorable terms, if at all.