Mannatech — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the three months ended September 30, 2026, were $24.9 million, a decrease of $4.3 million (14.6%) compared to $29.2 million in the same period in 2025; constant dollar sales also decreased by 14.6% with no foreign exchange impact on GAAP net sales.
• Gross profit margin decreased to 74.7% for the quarter ended September 30, 2026, from 76.4% in the same period in 2025.
• Selling and administrative expenses decreased by $0.4 million (4.1%) to $8.7 million in the third quarter of 2026, though as a percentage of net sales, they increased to 35.0% from 31.1% in 2025.
• Income from operations was $0.3 million for the three months ended September 30, 2026, down from $2.0 million in the same period in 2025.
• The Company reported a pre-tax loss of approximately $2.0 million for the quarter ended September 30, 2026, compared to pre-tax income of $2.5 million in 2025.
• Net income was $8.9 million ($4.61 per diluted share) for the quarter ended September 30, 2026, compared to $1.9 million ($1.01 per diluted share) in 2025; this increase was driven primarily by a $10.9 million non-cash income tax benefit and does not reflect an improvement in operating performance.
• Net realized and unrealized foreign currency loss was $2.1 million for the quarter ended September 30, 2026, compared to a gain of $0.6 million in 2025.
• Cash and cash equivalents decreased 12.4% (or $0.8 million) to $5.4 million as of September 30, 2026, from $6.2 million as of December 31, 2025.
• Deferred revenue decreased to $1.6 million as of September 30, 2026, from $3.1 million as of December 31, 2025.
• Total liabilities decreased to $22.7 million as of September 30, 2026, from $35.2 million as of December 31, 2025, primarily due to a reduction in deferred tax liabilities from $9.8 million to $0.2 million.
• Total shareholders' equity turned positive to $5.2 million as of September 30, 2026, from a deficit of $5.2 million as of December 31, 2025.

Business Segments and Product Lines:

• Net sales by region for the three months ended September 30, 2026, were: Americas ($6.0 million, 24.1%), Asia/Pacific ($16.6 million, 66.7%), and EMEA ($2.3 million, 9.2%).
• The approximate number of new and continuing independent associate and preferred customer positions held as of September 30, 2026, was 111,000, down from 119,000 in the same period in 2025.
• Recruiting new associates and preferred customers decreased 30.5% in the third quarter of 2026 compared to the third quarter of 2025.
• Mannatech operates in China under a cross-border e-commerce platform that is separate from its network marketing model.

Risks and Challenges:

• Changes in current trade policies, including tariffs, could affect the Company's cost structure and profitability.
• The Company's ability to mitigate increased costs and disruptions may be limited by operational and supply chain constraints and uncertainties, especially in the short term.
• Forward-looking statements identify risks including the inability to attract and retain associates and members, increases in competition, litigation, regulatory changes, and planned growth into new international markets.

Management Commentary and Tone:

• Management noted that third-quarter net income was driven primarily by a non-cash income tax benefit and does not reflect an improvement in operating performance.
• Management stated that while they take steps to mitigate or avoid increased costs from trade policies, their ability to do so may be limited.

Other Key Points:

• A non-cash income tax benefit of $10.9 million was recognized for the three months ended September 30, 2026, resulting from the remeasurement of deferred tax liabilities on unremitted foreign earnings, specifically related to withholding taxes on the Korean subsidiary and other foreign jurisdictions.
• On October 14, 2026, the Company completed an internal restructuring of certain foreign subsidiaries that resulted in a non-cash remeasurement of deferred tax liabilities and a corresponding increase in consolidated stockholder's equity.
• On October 16, 2026, the Nasdaq Listing Qualifications staff notified the Company that it complies with the minimum stockholders' equity requirement of Nasdaq Listing Rule 5550(b)(1) following the restructuring.
• The restructuring and tax benefit did not generate cash and did not affect net sales, cash flows, or results of operations.
• Non-GAAP constant dollar measures were disclosed to exclude the impact of foreign currency translation on net sales, gross profit, and income from operations.