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/ CORRECTION - Mannatech Reports First Quarter EPS Increase of 29%

Posted on: Wednesday, 10 May 2006, 15:04 CDT

In the news release "Mannatech Reports First Quarter EPS Increase of 29%," issued earlier today by Mannatech, Inc. (NASDAQ: MTEX), we are advised by the company that the table corresponding to "The number of independent associates and members who purchased our products and packs within the last 12 months" should read:

"                 2006            2005                -----------     -----------  New           228,000  45%    192,000  48%  Continuing    282,000  55%    209,000  52%,"

rather than:

"                 2006            2005                -----------     -----------  New           162,000  32%    192,000  48%  Continuing    348,000  68%    209,000  52%"

as originally issued. Complete corrected text follows.

Mannatech Reports First Quarter EPS Increase of 29%

COPPELL, TX -- 05/10/2006 -- Mannatech, Incorporated (NASDAQ: MTEX) today announced record first quarter earnings for the three months ended March 31, 2006 as compared to the prior year's comparable quarter. Highlights from the quarter included:

 --  Sales grew 16% to $99.0 million, up $13.9 million; --  Earnings before income taxes rose 19% to $9.3 million; --  Net income increased by 27%, or $1.2 million, to $5.9 million from     $4.7 million; --  Diluted earnings per share rose by 29%, or $0.05 per share, to $0.22     per share from $0.17 per share; --  Current independent associates and members increased to 510,000; up by     109,000 or 27% from a year ago.      

Chairman of the Board and Chief Executive Officer Samuel Caster stated, "We are pleased with our results as solid sales and profit growth continued in the first quarter. We began our annual travel incentive qualifying period in January this year instead of March, which has been the traditional kick-off for the incentive. This timing shift added approximately $1.7 million in travel cost accrual to the 2006 quarter, seen in our higher rate of commission and incentive expense this year. However, we reduced our total operating expense rate by 1.7 points, and our operating profit increased by $1.5 million. Our current associate and member count grew 27% against last year and topped the half-million mark for the first time. These successes clearly demonstrate the viability of our products as well as that of our business model."

"During the first three months of 2006, we maintained a debt-free balance sheet, improved our working capital, reduced our inventory levels, and preserved a strong cash position of over $71 million. We increased our quarterly declared dividends to $0.08 per share as compared to $0.07 per share last year. Our Board intends to share the growth in the value of Mannatech by continuing our quarterly dividend payments to our shareholders as a reward for their long-term stock ownership," said Mr. Caster.

Sales by location for the three months ended March 31, in millions, were:

                                            March 31, 2006   March 31, 2005                                            --------------   -------------- United States                              $67.1   67.8%    $ 56.1   65.9% Canada                                       7.3    7.4%       6.7    7.9% Australia                                    7.9    8.0%       8.1    9.5% United Kingdom                               2.0    2.0%       2.4    2.8% Japan                                        9.2    9.3%       7.8    9.2% New Zealand                                  2.5    2.5%       3.6    4.2% Republic of Korea                            1.6    1.6%       0.4    0.5% Taiwan*                                      0.8    0.8%         -      -% Denmark**                                    0.6    0.6%         -      -% Germany***                                     -      -%         -      -%                                            -----  -----      -----  ----- Total                                      $99.0    100%     $85.1    100%                                            =====  =====      =====  ===== * Taiwan began its operations in June 2005. **United Kingdom began selling products in Denmark in August 2005. ***United Kingdom began selling products in Germany in March 2006. 

The number of independent associates and members who purchased our products and packs within the last 12 months is as follows:

                                       For the twelve months ended March 31,                                       ------------------------------------ Current Independent Associates  and Members                                   2006           2005                                            -----------     ----------- New                                        228,000  45%    192,000  48% Continuing                                 282,000  55%    209,000  52%                                            -------  --     -------  -- Total                                      510,000 100%    401,000 100%                                            ======= ===     ======= === 

About Mannatech

Mannatech, Incorporated is a global wellness solutions provider that develops innovative, high-quality, proprietary nutritional supplements, topical products, and weight management products, which are sold through a global network-marketing system operating throughout the United States and the international markets of Canada, Australia, the United Kingdom, Japan, New Zealand, the Republic of Korea, Taiwan, Denmark, and Germany.

Please Note: This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of phrases or terminology such as "may,""believes,""enthusiastic,""demonstrates,""intends,""optimistic," and "plans" or other similar words or the negative of such terminology. Similarly, descriptions of Mannatech's objectives, strategies, plans, goals or targets contained herein are also considered forward-looking statements. Mannatech believes this release should be read in conjunction with all of its filings with the United States Securities and Exchange Commission and cautions its readers that these forward-looking statements are subject to certain events, risks, uncertainties, and other factors. Some of these factors include, among others, Mannatech's inability to attract and retain associates and members, increases in competition, litigation, regulatory changes, and its planned growth into new international markets. Although Mannatech believes that its expectations, statements, and assumptions reflected in these forward-looking statements are reasonable, it cautions its readers to always consider all of the risk factors and any other cautionary statements carefully in evaluating each forward-looking statement in this release, as well as those set forth in its latest Annual Report on Form 10-K, and other filings filed with the United States Securities and Exchange Commission, including its current reports on Form 8-K. All of the forward-looking statements contained herein speak only as of the date of this release.

(Complete quarterly report filed on its Form 10-Q, which is expected to be filed with the Securities & Exchange Commission and published on its corporate website www.mannatech.com on or about May 10, 2006. Unaudited Consolidated Financial Statements to follow)

                  MANNATECH, INCORPORATED           CONSOLIDATED BALANCE SHEETS - (UNAUDITED) (in thousands, except share information and per share amounts)                                               December 31,        March 31,                                                   2005              2006                                                ---------         ---------         ASSETS Cash and cash equivalents                      $  56,207         $  54,262 Short-term investments                             1,974             1,984 Restricted cash                                    2,777             2,838 Accounts receivable                                  548               921 Income tax receivable                                  -             2,389 Inventories, net                                  19,811            17,051 Prepaid expenses and other current assets          3,471             6,393 Deferred tax assets                                  671               424 Note receivable from affiliate                       153               155                                                ---------         ---------   Total current assets                            85,612            86,417 Long-term investments                             15,375            15,375 Property and equipment, net                       10,951            11,174 Construction in progress                           8,157            12,813 Long-term restricted cash                          1,476             1,479 Other assets                                       1,121             1,176 Long-term deferred tax assets                        103               114                                                ---------         ---------   Total assets                                 $ 122,795         $ 128,548                                                =========         =========      LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of capital lease               $      23         $      21 Accounts payable                                   5,476             3,499 Accrued expenses                                  16,941            17,535 Commissions and incentives payable                15,588            18,338 Taxes payable                                      5,773             3,427 Deferred revenue                                   3,712             4,530                                                ---------         ---------     Total current liabilities                     47,513            47,350 Long-term royalties due to an affiliate            3,341             3,224 Long-term deferred tax liabilities                 1,086             2,075 Long-term liabilities                                537               565                                                ---------         ---------   Total liabilities                               52,477            53,214 Commitments and contingencies 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, 27,404,513 shares issued  and 26,738,364 shares outstanding in 2005  and 27,507,048 shares issued and  26,840,899 shares outstanding in 2006                 3                 3 Additional paid-in capital  36,699  37,848 Retained earnings                                 42,505            46,266 Accumulated other comprehensive loss              (1,098)             (992)                                                ---------         ---------                                                   78,109            83,125 Less treasury stock, at cost, 666,149 shares  in 2005 and 2006                                 (7,791)           (7,791)                                                ---------         ---------   Total shareholders' equity                      70,318            75,334                                                ---------         ---------   Total liabilities and shareholders' equity   $ 122,795         $ 128,548                                                =========         =========                  MANNATECH, INCORPORATED       CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED)      (in thousands, except share and per share information)                                                      For the three months                                                       ended March 31,                                                        2005         2006                                                      -------      ------- Net sales                                            $85,145      $98,971     Cost of sales                                     12,930       14,561     Commissions and incentives                        37,563       45,374                                                      -------      -------                                                       50,493       59,935                                                      -------      ------- Gross profit                                          34,652       39,036 Operating expenses:  Selling and administrative expenses                  16,120       17,777  Other operating costs                                10,921       12,004                                                      -------      -------     Total operating expenses                          27,041       29,781                                                      -------      ------- Income from operations                                 7,611        9,255     Interest income                                      332          572     Other expense, net                                   (92)        (514)                                                      -------      ------- Income before income taxes                             7,851        9,313        Provisions for income taxes                    (3,189)      (3,405)                                                      -------      ------- Net income                                           $ 4,662      $ 5,908                                                      =======      ======= Earnings per share:    Basic                                             $  0.17      $  0.22                                                      =======      =======    Diluted                                           $  0.17      $  0.22                                                      =======      ======= Weighted-average common shares outstanding:    Basic                                              27,098       26,764                                                      =======      =======    Diluted                                            28,035       27,392                                                      =======      ======= 

 Contact Information: Steve Fenstermacher CFO Investor Relations (972) 471-6512 Contact via http://www.marketwire.com/mw/emailprcntct?id=C1811C8B9EC43180 Corporate web site: www.mannatech.com

SOURCE: Mannatech, Inc.

Source: MARKET WIRE

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