Mannatech(US:MTEX)2024-08-13 21:01Sales Performance - Net sales for Q2 2024 decreased by $4.9 million (14.9%) to $27.7 million compared to $32.6 million in Q2 2023, primarily due to supply chain constraints and economic weakening in Asia[3] - Asia/Pacific region sales accounted for 57.4% of total sales in Q2 2024, down from 59.2% in Q2 2023, reflecting weaker economic conditions[10] - Q2 2024 GAAP net sales were $27.7 million, with a constant dollar adjustment of $0.7 million, resulting in non-GAAP net sales of $28.4 million, a 12.9% decrease compared to Q2 2023[12] - YTD 2024 GAAP net sales were $57.1 million, with a constant dollar adjustment of $1.5 million, resulting in non-GAAP net sales of $58.6 million, a 12.1% decrease compared to YTD 2023[13] Profitability and Margins - Gross profit margin decreased to 77.1% in Q2 2024 from 78.5% in Q2 2023, driven by increased freight costs and sales promotions[3] - Q2 2024 GAAP gross profit was $21.4 million, with a constant dollar adjustment of $0.5 million, resulting in non-GAAP gross profit of $21.9 million, a 14.5% decrease compared to Q2 2023[12] - YTD 2024 GAAP gross profit was $44.5 million, with a constant dollar adjustment of $1.2 million, resulting in non-GAAP gross profit of $45.7 million, a 12.6% decrease compared to YTD 2023[13] Expenses and Costs - Commission expenses decreased by 12.5% ($1.6 million) to $11.1 million in Q2 2024, but as a percentage of net sales, it increased to 40.0% from 38.9% in Q2 2023[3] - Selling and administrative expenses decreased by 17.0% ($2.2 million) to $10.9 million in Q2 2024, with payroll costs reduced by $0.9 million and legal fees by $0.7 million[3] Net Loss and Operational Performance - Net loss for Q2 2024 was $0.6 million ($0.33 per diluted share), compared to a net loss of $1.1 million ($0.59 per diluted share) in Q2 2023[3] - Q2 2024 GAAP loss from operations was $1.1 million, with a constant dollar adjustment of $0.1 million, resulting in non-GAAP loss from operations of $1.0 million, unchanged from Q2 2023[12] - YTD 2024 GAAP loss from operations was $0.3 million, with a constant dollar adjustment of $0.4 million, resulting in non-GAAP income from operations of $0.1 million, a 150.0% change compared to YTD 2023[13] Cash and Financial Position - Cash and cash equivalents increased by 18.9% ($1.5 million) to $9.2 million as of June 30, 2024, compared to $7.7 million at the end of 2023[3] - Foreign exchange gains contributed $1.1 million in Q2 2024, including a one-time gain of $0.2 million from the liquidation of the company's entity in Sweden[3] Associate and Customer Metrics - The number of independent associates and preferred customers remained constant at approximately 142,000 as of June 30, 2024, with a 21% decrease in associate attrition rate[5] Outlook and Strategy - The company expects continued economic challenges for the remainder of 2024 but remains committed to increasing revenues through disciplined cost controls and expanding its sales network[6]