OpTree

Mannatech - a nutritional supplement company based in Coppell, Texas, has been through a bit of a rough patch this year. Over the last year or so, the company has been involved in a class action suit that has negatively impacted the company. Now, more bad news as the company (NASDAQGS: MTEX) announced its first quarter profits.

The company posted a loss of $2.3 million or 9 cents a share, for the first quarter compared with a profit of $6.9 million dollars or 26 cents per share in the first quarter last year. Sales fell 13 percent to $91.5 million from $104.8 million last year. Sales in the U.S. decreased by 23 percent.

“Our U.S. market continues to experience a decline in net sales and recruiting impacted by ongoing litigation and a weaker economy,” President and Chief Executive Terry Persinger said in a statement.

The Coppell-based company, which has been involved in lawsuits over its sales practices, posted a loss of $2.3 million, or 9 cents per share, compared with a profit of $6.9 million, or 26 cents per share, in the quarter last year.

This past March, Mannatech was ordered to pay $11.25 million dollars to settle a class action suit filed by the Texas attorney general’s office. The suit was brought on by lawsuits brought forth by shareholders who questioned some of the company’s sales practices. Mannatech settled the suit without having to admit any wrongdoing; however, the damage had already been done as we can see with the significant decline in sales and profits.

The one bright spot for the company over the last year were the strong sales overseas. International sales rose 14 percent, led by sales in Japan and Korea.

The stock has gotten pretty crushed this year and it will take a great deal for the company to rebound from where it is today. First thing I would do is fix the website and make it more inviting and easier to use. Second is, brand/package your products better so they can be marketed to a wider audience. Third, pump confidence back into your distributors and let them know that you have the financial capacity to support them through this blip (if it is a blip) and offer even more competitive compensation packages to retain your lifeline.

Popularity: 1% [?]