MTEX ==> The Columbus Day Winner [Archive] - Mr. Market's Stock Picking Forum

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mrmarket

10-17-2006, 01:03 PM

On any given day after school we probably have 20 boys, ages between 12 – 16, running through our humble home, playing video games and rummaging through our pantry cabinets. Given this kind of adolescent throughput, what do you suppose are the chances that a bag of Gummy Bears would last more than a couple of hours? Of course the answer cannot be given in hours, it is usually a matter of minutes.

Of course, treating the neighborhood kids to all kinds of sugar, soda and caffeine probably isn’t the best way to ingratiate ourselves with our neighbors (unless our neighbor is a dentist, which he is but I digress). So from time to time, Mrs. Market decides that it might be good to leave out a basket of apples or carrots for the kids. Of course when I get home from work, I look for the Gummy Bears but all I find are the apples and the carrots that the kids have not consumed.

Alright, so the kids don’t eat the apples. So our next idea was to try something new and different. Manna•Bears™—Mannatech’s latest product innovation for children—supports every parent’s desire to minimize the continuing chore of getting kids to consume the proper nutrients. Manna•Bears™ are designed as a delicious, chewy, sweet supplement in colorful, gummi-bear shapes—a mouthwatering natural health product kids will come back for again and again.

In addition to its specially formulated glyconutritional blend, Manna•Bears™ supplement with extracts of 12 different dehydrated fruits and vegetables, plus antioxidant green tea powder. Everything is packed into a colorful, wholesome pectin base, derived from natural sources.

When used as part of a healthful diet along with Glyco•Bears® multivitamin/mineral supplements, Manna•Bears™ are a wonderful way to help children stay healthy and grow properly.

Well guess what…the kids didn’t eat the MannaBears because most likely they tasted like crap. I didn’t think this was a big deal until I saw that the MannaBears cost $25 for a bottle of 120. That’s 21 cents per Mannabear. Which led me to believe that if any kid was eating this stuff, the people that made Mannabears…Mannatech..were making big bucks.

So today I bought MTEX (Mannatech) at 17.22. I will sell it in 4 to 6 weeks at 19.87. Here’s why I like MTEX.

MTEX stock is up 64% in the last 52 weeks, yet its PE is only 14 and its forward PE is only 12. Take a look at the chart:

http://chart.finance.yahoo.com/c/1y/m/mtex

Vibrant health is no longer a certainty. For many, it is intermittent at best. This realization has triggered a Wellness Revolution, and it’s changing the lives of people around the world. Mannatech is on the cutting edge of new technologies that provide what every body needs for optimal health. Even more than optimal health products, Mannatech offers you the opportunity for an optimal life. The chance to be part of something meaningful. Something driven by purpose and characterized by integrity. Something bigger than yourself. I take this information to heart and have changed my behavior. Just last week when I was in Vegas, I drank Coors Lite instead of Heineken and smoked only 5 cigars. Health is important.

Mannatech develops innovative, high-quality, proprietary, nutritional supplements, skin-care and topical products, and weight-management products that are sold through approximately 526,000 independent associates and members in the United States, Canada, Australia, the United Kingdom, Japan, New Zealand, Republic of Korea, Taiwan, Denmark, and Germany. Mannatech’s products are focused around impacting optimal health and wellness and are based on the science of carbohydrate technology and phytochemistry. Mannatech’s flagship patented ingredient – Ambrotose™ is found in the majority of its products and is based on the science that
certain naturally-occurring components of various plants are believed to effectively support optimal health and wellness, as well as address certain important aspects of the body’s immune system. An anti-oxidant newcomer launched last year, Ambrotose-AO uses a blend of anti-oxidants mixed with the sugars to supposedly boost the immune system and help fight off environmental toxins. It’s all about glyconutrients.

Medical research acknowledges that eight glyconutrient sugars are needed at the cellular level for optimum immune system function. Considering that six of these glyconutrients are often lacking in modern diets, Mannatech sought new and better sources of the nutrients. The effort culminated in the Ambrotose complex. Twenty patents -- including one from the U.S. Patent and Trademark Office -- have been issued to Mannatech for technology related to the Ambrotose complex.

How does the body use glyconutrients?

Over the last decade, researchers have made many exciting discoveries, but few are as significant as the realization that carbohydrates aren’t just for energy. Certain sugars that we call glyconutrients or super sugars aren’t burned as fuel like glucose, but are used to communicate with and to control and protect every cell in the body. Just as computers need a code to write and translate information, your body needs a code to operate. This sugar code of biological information exists in and on every cell in your body.

According to Mannatech, the body joins these sugars to proteins making structures known as glycoproteins which are attached to the surface of every cell. They send and translate commands from one cell to another throughout your body’s 600 trillion cells. Projecting from the cell surface, they act as keys to “unlock” the required functions of the adjoining cell. If the right glycoprotein “keys” are available, the body functions smoothly as the flow of information between cells is uninterrupted. If the needed glycoproteins are not available, communication is slowed or impaired. When I don’t get enough sleep, my communication is also slowed and impaired..so I know what the man is talking about.

Getting the blend of sugars in Ambrotose® complex provides your body with a ready supply of raw materials for coding. No combination of vitamins, minerals, amino acids or herbals can take their place. You become an instant genius, like $$$MR. MARKET$$$.

Dr. Bill McAnalley, Mannatech Senior Vice President and Chief Science Officer, reasoned that if mannose supported health, so would the other specific sugar molecules known to be involved in all cellular communication. Other scientists, working independently of Dr. McAnalley, proved that proteins, due to the limited number of ways that amino acids bond, could not account for all of the functions performed by the body. Only carbohydrates could be combined in the number of ways required to account for the body’s enormous coding capacity.

Does this stuff work? I have no idea…but it sells like crazy. Today Mannatech has more than two dozen glyconutritional products for adults and children that address health and nutrition, sports performance, weight management and skin care.
Here are some factoids on Mannatech:

• In business since 1993;
• Solid balance sheet with limited debt;
• Core products based on patented propriety raw material blend;

Mannatech has extremely loyal customers who value the benefits and quality from its products. Mannatech focuses on transitioning identified research and development into innovative science backed proprietary patentable products that target optimizing optimal health. Furthermore, Mannatech offers its independent Associates a host of opportunities to succeed in their financial pursuits through creative training aids, specialized seminars, and innovative technology. Hold on a minute, did I say Associates? Yep..you guessed it. Mannatech is an Amway, Shaklee pyramid clone. Now don’t get me wrong, you won’t find boxes of this stuff in my garage and closets…. but direct selling works. People do buy from their friends. Mannatech has a sales force that they employ and pay NOTHING! Talk about cost control.

Network-marketing minimizes up-front costs as compared to conventional marketing methods and allows Mannatech to be more responsive to the everchanging, overall market conditions of the marketplace. Mannatech intends to continue to research potentially new products and focus on controlled successful international expansion. Mannatech has over one-half million independent associates and members purchasing its packs and products. With this kind of broad reaching platform, it’s difficult to imagine any of these sales forces eroding in the near future. Mannatech has hired several scientists to sift through research on carbohydrate technology and help come up with new products using it. Plenty of rank and file converts vouch for the products. Mannatech's direct sales model uses thousands of customers to spread the word through personal testimony.

Mannatech’s newest product is MannaBars..not to be confused with MannaBears. I guess MannaBars are a lot like the NitroTech protein bars that I take after I lift in the morning. Although people who eat MannaBars probably walk around in sandals and don’t have 19” biceps like the people who eat NitroTech protein bars.

So how does this all add up? This company is making oodles of money. Last quarter, MTEX reported record earnings for second quarter 2006 of $0.31 per diluted share, up 48% from second quarter 2005 earnings of $0.21 per diluted share. Pretax profit reached $13.4 million for the quarter, up 41% over prior year, reflecting favorable costs relative to sales. Net income for the quarter reached a record $8.6 million with a net profit ratio of 8.2%, a rate improvement of 2.5 points versus 2005, partially due to a lower effective tax rate in the quarter.

Total second quarter revenue was $104.8 million, up 2.1 percent versus prior year. Total current Mannatech independent associates and members grew to 526,000 as of June 30, 2006, an increase of 19.5% compared with the same time prior year. The record current independent associate and member count resulted primarily from the increase in continuing current independent associates and members.

The main factors that will impact the personal products industry as a whole for the remainder of the year are the direction of consumer spending and raw material prices. Both of these are in a favorable trend right now. Bolstered by an increased awareness in health and well being, the overall growth should be “healthy”.

As long as Mannatech continues to grow their membership (geometrically or pyramidically) they will continue to grow their sales. ANAL-ysts have MTEX pegged to earn $1.25/share on revenues of $420 million. Actually, $$$MR. MARKET$$$ thinks that this ANAL-yst won’t be too far off the mark. $$$MR. MARKET$$$ projects 2006 earnings of $1.45/share on revenues of $471 million. At today’s PE of 14, the $1.45/share would get the stock up to $20.30, which is in excess of my sales target.

$$$MR. MARKET$$$’s growth rate projections are very reasonable when you consider that 5 year sales growth is 24%, 3 year sales growth is 42% and one year sales growth is 32%. As long as more people are eating Manna Bars and Manna Bears, MTEX will be seeing green and that’s not the green tea they are selling. I’m talking dead presidents..Jackson, Lincoln and mostly Franklins (even though he wasn’t a president).

Return on Equity is up to 45%. ROA is 26%. MTEX has no long term debt. Mannatech has more cash and current assets on its books than it ever has had. It’s net income, as a percent of revenue, is also at a historical high of 7.4%. Also it pays a 2% dividend. All good things for investor security.

Here’s what the boss, Sam Caster, Board Chairman and CEO, had to say:

"We are working to strengthen our growth trend in the second half of 2006 based on significant new product introduction. This will include the launch in the fourth quarter of a revolutionary new product, called PhytoMatrix, the nutrition industry's first supplement containing completely standardized levels of all natural vitamin complexes and 100% plant sourced minerals and phytochemicals. This important product development fills the needs of health-conscious consumers who prefer natural plant-based wellness products over synthetic ingredients. In addition, we are preparing to expand 'Optimal' our proprietary new preservative-free skin care system, into several more of our current markets. 'Optimal' was successfully introduced in Japan in mid-May, where it generated more than $1.2 million in sales by the end of June."

While he’s over in Japan, maybe he should sell some of this stuff to North Korea. If that guy over there felt better about himself, maybe he’d stop lighting off his nukes. If people buy this stuff, and feel good about what they are buying, then $$$MR. MARKET$$$ will be a happy man.

Let me know what you think of this write up and if you like it, email it on to a few friends.

I am HUGE!

$$$MR. MARKET$$$

www.mrmarketishuge.com

billyjoe

10-17-2006, 01:18 PM

Mr. Market,
You're still huge but I'm going to have to think about this one. Did you taste the manna bears? Who will eat them if they're foul tasting? My wife makes dirt pudding and could use some manna worms to appear to be crawling out of the pudding. Kids go crazy over it. We had plenty of bears around here , but the worms are difficult to find.

-------billyjoe

mrmarket

10-17-2006, 02:15 PM

did any of you get my email on this pick? I didn't even get it myself!

Gatorman

10-17-2006, 02:20 PM

Got it at 12:11 P.M. Eastern

spikefader

10-17-2006, 02:20 PM

I take this information to heart and have changed my behavior. Just last week when I was in Vegas, I drank Coors Lite instead of Heineken and smoked only 5 cigars. Health is important.LOL great writeup MM.

You make a strong case indeed. You're sittin' pretty with the entry, benefiting nicely from the deep discount yesterday, and your target of 18.87 is at good technical resistance, it's doin' the impulsive thing up intraday, taking out shorts with a chuckle.....price action bodes well for a full recovery from the whacking it received. Good luck!

Another look at the long-term triangle has me lookin' for my horns again :D hehe

http://img273.imageshack.us/img273/3994/2137ew3.gif

spikefader

10-17-2006, 02:21 PM

Got it at 12:11 P.M. Easternme too; email arrived 12.10 eastern.

spikefader

10-17-2006, 02:27 PM

And for any TA lovers out there, here's the current intraday thought:

http://img281.imageshack.us/img281/4863/mtexcandle4h46m5m20061017122653dl0.gif

lemonjello

10-17-2006, 05:19 PM

Spike,

Could you explain what the 'c' part is? All I know is the 1,2,3...

And where would you put a stop on this one - below yesterdays candle? TIA.

And for any TA lovers out there, here's the current intraday thought:

http://img281.imageshack.us/img281/4863/mtexcandle4h46m5m20061017122653dl0.gif

nwinvestor

10-17-2006, 05:34 PM

I didn't get the email on the west coast.

alice4321us

10-17-2006, 05:43 PM

I didn't get an email either. I am on East Coast in Albany, NY.

mrmarket

10-17-2006, 05:58 PM

Seems like the server crapped today...oh well. Better for the people who come visit!

spikefader

10-17-2006, 06:53 PM

Spike,

Could you explain what the 'c' part is? All I know is the 1,2,3...

And where would you put a stop on this one - below yesterdays candle? TIA.
Sure lemon.

Here's the basic pattern of 12345abc.

http://img267.imageshack.us/img267/7546/12345abcqx0.gif (http://imageshack.us)

And here's the intraday count for MTEX. The blue 'c' came in about 1.3% cheaper than the high of the 5th. And the black 'c' is 3.3% cheaper than the high of the 5th. So there is a worthwhile TA lesson in today's price action; i.e. go for the discount at 'c' rather than buying into the emotion of a 5th (fear of missing the move or exhuburence that it's headed to the moon). Might just make the difference to the old risk reward ratio.

http://img144.imageshack.us/img144/6654/mtexfuzzycountintradayhb5.gif (http://imageshack.us)

Runner

10-17-2006, 09:05 PM

MM, if this rascal has a few more days like today you might hit your target in record time....

Runner

10-17-2006, 09:07 PM

Oh last thing, I always enjoy reading your write ups as they give me more insight into FA.

Websman

10-17-2006, 09:31 PM

Excellent entry on MTEX Your Hugeness!!! The Vulcans believe that you will see a quick profit with this stock...

...Attention - all VTP inner circle members...
Please bring all offerings of meats and cheeses to tonights meeting as tonight is the night that we will light the holy candles and worship at the feet of our huge Mr Market statue. Our offerings will ensure that Mr Market achieves a speedy profit on his MTEX trade.

"The Vulcan prayer"
Oh Mr Market... The Vulcans are humbled to be in your presence. We are gathered here tonight to honor your hugeness, your 19" biceps, and your chick magnet qualities...even though we are not chicks. The Vulcans would like to express our gratitude for revealing your huge picks to us. We feel honored and blessed.
The Vulcans are also forever thankful for your recognition of us in the post you directed towards us on December 12, 2005. We consider this day sacred...oooohmmmmmmmmmmmmmmmmmmm December 12 ooohmmmmmm We feel blessed that you are aware of who we are...We feel at one with you, oh Great One.
The Vulcans would like to close this prayer with an offering of meats and cheeses. Al members shall now lay their offerings upon your feet. Your are Huge... Your are Great... You are........ the one and only...... Mr. Market...
Oooooohhhhhhhhhmmmmmmmmmm....ohhhhhhmmmmmmmmmmmmmm ......

mrmarket

10-17-2006, 10:17 PM

Jason..where is my Yahoo spam post on the MTEX board? You are slumping!

jiesen

10-17-2006, 11:28 PM

Jason..where is my Yahoo spam post on the MTEX board? You are slumping!

ah, oh yeah... will do. too bad I missed buying this sucker, too. foreign time zones can be a bitch!

peanuts

10-18-2006, 11:29 AM

I look forward to congratulating you, Mr. Market :)

jc4fun3

10-18-2006, 12:13 PM

Mannatech Class Action Suit

http://www.rickross.com/reference/mannatech/mannatech17.pdf

Consolidated Class Action Complaint for Securities Fraud

• “significant knowledge regarding Mannatech employees making improper health claims and Mannatech-sponsored conventions, as well as Defendants’ knowledge of this illegal marketing and refusal to do anything to stop it.” (p. 30)
• “knowledge concerning, among other things, Mannatech’s foreign regulatory problems, defendant Caster’s “special” treatment of high-ranking associates who were allowed to violate the rules and make illegal health claims about Mannatech products, as well of video copies of health ‘testimonials’ that were kept on Mannatech’s website behind a ‘firewall’ specifically to avoid regulatory scrutiny.” (p. 35)
• “Caster was ‘very, very involved on the associate side’ of Mannatech’s business and that Caster knew what was happening among associates (i.e., illegal marketing). This confidential witness recalled that it was ‘very hard for Sam [Caster] to say no’ to high level associates and that Caster ‘doesn’t like conflict.’” (p. 56)
• “Dr. H. Reginald McDaniel, a former Mannatech ‘Medical Director’…sent out e-mails daily ‘prescribing’ various Mannatech products in various quantities to supposedly cure cancer and other diseases. This confidential witness recalled that Caster ‘absolutely, without question, had knowledge of what he [McDaniel] was doing.’ McDaniel even had a ‘recipe book’ for what amounts of products people should take for various diseases. She/he stated that the FDA was developing a file on McDaniel, which eventually prompted Caster to agree to move McDaniel to MannaRelief.” (p. 90)

ringo69

10-18-2006, 12:13 PM

I think this one will hit its target fast.

jc4fun3

10-18-2006, 12:14 PM

http://www.rickross.com/reference/mannatech/mannatech3.pdf

Agreed Final Judgment with Permanent Injunction between Samuel Caster (founder and CEO of Mannatech) and the State of Texas:

• “making any representation regarding the characteristics, ingredients, uses or benefits of any good unless, at the time of making the representation, you possess and reasonably rely upon competent scientific evidence that substantiates such representation.” (p. 2)
• “representing directly or by implication, that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have.” (p. 2)
• “employing any testimonial or endorsement regarding a good’s characteristics, ingredients, uses or benefits that is inconsistent with competent scientific evidence.” (p. 2)
• “Causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another.” (p. 2)
• “Employing a commission structure wherein a sales associate receives a commission or any benefit or credit for purchases made by that sales associate.” (p. 2)

jc4fun3

10-18-2006, 12:16 PM

UC Berkeley Wellness Letter
http://wellnessletter.com/html/ds/dsGlyconutrients.php

Cystic Fibrosis Foundation
http://www.cff.org/news/consumer_alerts/index.cfm?ID=7033&blnShowBack=True&idContentType=1207

Mayo Clinic
http://www.mayoclinic.com/health/glyconutrients/AN01102

Society for Glycobiology
http://glycobiology.org/Default.aspx?tabid=74

Australian Doctor
http://www.australiandoctor.com.au/news/f0/0c0362f0.asp

Cancer Nutrition Info, LLC
http://web.cancernutritioninfo.com/main.cfm?id=1543&display=yes&RequestTimeout=500

CancerDecisions
http://www.cancerdecisions.com/050105_page.html
http://www.cancerdecisions.com/050805_page.html

ALSforums.com
http://www.alsforums.com/scamwatch/mannatech.php

mrmarket

10-18-2006, 12:37 PM

Looks like JC is a big Mannabears eater...

Websman

10-18-2006, 05:51 PM

We now have Yahoo spam!!!

Best reason to own MTEX http://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_brdr_g16.gif (8 Ratings) tooltip1 = new YAHOO.widget.Tooltip('tt1', { context:"Tooltip1100175",autodismissdelay: 60000, showdelay: 1250} ); 17-Oct-06 10:31 pmtooltip1 = new YAHOO.widget.Tooltip('tt1', { context:"TViewTooltip100175",autodismissdelay: 60000, showdelay: 1250} );
is because the best stock picker around just picked Mannatech to be the next HUGE winner!

Check it out:
http://www.mrmarketishuge.com/showthread... (http://www.mrmarketishuge.com/showthread.php?t=1610)

Read this awesome write-up then go eat some Mannabars!

lemonjello

10-18-2006, 06:40 PM

billyjoe

10-18-2006, 08:48 PM

Seems like the server crapped today...oh well. Better for the people who come visit!

Mr.Market,
I don't think I'll be getting mail from you anymore. It would always come in bulk mail and I had to block everything since I started getting hundreds of bulk mails per day. One or two get through in the regular in box. Can't figure out how they do it. I read all your posts here so I won't miss anything.

-------------billyjoe

mrmarket

10-18-2006, 09:09 PM

Mr.Market,
I don't think I'll be getting mail from you anymore. It would always come in bulk mail and I had to block everything since I started getting hundreds of bulk mails per day. One or two get through in the regular in box. Can't figure out how they do it. I read all your posts here so I won't miss anything.

-------------billyjoe

Sounds good...hopefully someday we will solve the secret of spam.

jiesen

10-18-2006, 10:22 PM

We now have Yahoo spam!!!

Best reason to own MTEX http://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_red16.gifhttp://us.i1.yimg.com/us.yimg.com/i/us/mb/star_brdr_g16.gif (8 Ratings)

is because the best stock picker around just picked Mannatech to be the next HUGE winner!

Check it out:
http://www.mrmarketishuge.com/showthread... (http://www.mrmarketishuge.com/showthread.php?t=1610)

Read this awesome write-up then go eat some Mannabars!

just doing my bit to help out... :)

by the way, MTEX hit my limit today, and I got in at 17.7! Now let's see it hit $20 next week so we can do this again!

New-born baby

10-18-2006, 10:38 PM

As a junior chartman I think I'm seeing a small bear flag being formed the last few days. Is that wrong? Not saying it won't make 15% but if that's a bear flag isn't the next support that would be a good buy point around 15?

Too early to tell, Lemon. It is possible, though. Click the postscrip link below entitled "bear flags" and read what it has to say. What we do know is that if/when MTEX busts the lower channel support, then the answer is "yes, Houston; we have a bear flag." At that point we are very thankful that MTEX has an option chain. :D But right now the chart is still bullish. One encouraging thing is that MTEX pushed up against resistance today. $18.09 is a very strong resistance, and we shouldn't expect MTEX to take it out the first time it touches it. IF MTEX closes above $18.09 the next day or two, I wouldn't fear the bear flag pattern at this time.

For those bears who are looking for a piece of meat, examine the chart for support, and we find the following:
$16.59
$14.92
$14.54
Heaviest support ($13.77)

If it is a bear flag, then most likely MTEX pulls back all the way to $13.77. Remember, we'll need a bust of the $16.59 support line first. If that fails, I think the others fail rather easily. But like I say: the chart is still bullish until it ain't. And it ain't bearish yet. :D But it hints that it may turn bearish soon.

We really shouldn't be shocked that MTEX pulled back like it did. It's the fourth time. Once she busts that resistance we ought to really get a nice move.

http://img204.imageshack.us/img204/5514/chart1iv1.gif (http://imageshack.us)

peanuts

10-19-2006, 03:48 PM

I finally got the email, today, about 13:45. It's a Yahoo! account

Nice write-up, by the way http://www.mrmarketishuge.com/images/icons/icon14.gif

spikefader

10-19-2006, 07:10 PM

http://img144.imageshack.us/img144/6654/mtexfuzzycountintradayhb5.gif (http://imageshack.us)

The pivot support buy ended up giving a nice 5% overnight move I notice...

Bidding 17.40 'c' support might be worth another shot...

billyjoe

10-19-2006, 08:11 PM

Mr. Market,
Two copies of "MTEX The Columbus Day Winner" just showed up in my inbox dated 10/17/06. Have they been floating in cyberspace for 2 days? How did you do that? Another huge accomplishment.

--------------billyjoe

Gatorper

10-20-2006, 07:51 PM

Bought MTEX @14.35 July 31, sold it @16.85 on Sept 18th Love that stock, would play it again, but I decided to trade other stocks.. Good luck on that one... I am doing well with BWNG at this moment.

lemonjello

10-21-2006, 07:35 PM

Look at an intraday chart for Friday. There is something going on at 17.75. Very strange. Looks like the bear flag is out and it starts moving up over 17.75. Am I wrong?

New-born baby

10-21-2006, 09:02 PM

Look at an intraday chart for Friday. There is something going on at 17.75. Very strange. Looks like the bear flag is out and it starts moving up over 17.75. Am I wrong?

MTEX is still bullish, and in "wait and see" mode. If she drops below $16.32, time to evacuate Dodge. If she busts up through the 10 day ($18.33 and falling), Bull charge! Right now it is consolidating. It is important to watch the volume here. If it dries up and the stock price moves up some, that may signal a bear flag. If you are in MTEX, you just need to baby sit the thing until the signal is clear which direction she is going to go.

One thing that is "going on" is that Friday was options expiration. Stocks do very strange things on that day.

This chart here is similar in structure to MTEX. We just need to watch and see if MTEX is going to make a duplicate pattern. We hope not, of course, but as Spike says, "It is what it is." And we'll have to wait and see "what it is."

http://img137.imageshack.us/img137/8706/chart1tx1.gif (http://imageshack.us)

Tatnic

10-22-2006, 08:52 AM

Too early to tell, Lemon. It is possible, though. We really shouldn't be shocked that MTEX pulled back like it did. It's the fourth time. Once she busts that resistance we ought to really get a nice move.

http://img204.imageshack.us/img204/5514/chart1iv1.gif (http://imageshack.us)

I believe your chart says it all. Buy at the 200 day, not here. If the fundamentals haven't changed and Andrew Left hasn't focused on the company (or someone like him), then why not buy it when its on sale?

BTW...I have a couple of hunting buddies who drank the koolaid and sell this stuff. They are seemily intelligent guys but they actually believe the bs about "soil depletion" and how the stuff they peddle is the only thing that can replace those lost minerals and nutrients. ONe of them also claims that his little bout of impotence was cured by this miracle substance.

My understanding of the company is that its a classic pyramid scheme along the lines of avon, amway, etc. Nothing illegal about it but the company does push the envelope as witnessed by those court cases. And one could argue that wall street is nothing but a huge pyramid scheme and that the company has a great business model, ie they don't have to hire salesmen to push their snake oil. And we all know how well crap sells in this country with the right marketing.

Bottom line, the stock may do fine in the short-term (heck, in the longer term who knows?)

ps..its manna bars, not bears. The manna bears haven't shown up in numbers yet, but you don't want to be left holding the bag when Left does a little piece on this one.

New-born baby

10-22-2006, 09:53 AM

Please, NO AMWAY! :D

I hate the pyramid schemes.

billyjoe

10-22-2006, 10:07 AM

New-born,
I don't want to get political here , but do you realize that Richard DeVos , republican candidate for governor of Michigan is an executive and son of billionnaire founder of Amway (now Alticor) they also go under another name. Anything to distance themselves from Amway. DeVos has unlimited funds and really believes the Amway model is the way this country should do business. This guy is dangerous.

-------------billyjoe

New-born baby

10-22-2006, 10:11 AM

mrmarket

10-22-2006, 07:38 PM

There are Manna Bears...I still have some uneaten ones in my house:

http://i5.ebayimg.com/02/i/08/02/fa/61_2.JPG

Websman

10-22-2006, 07:55 PM

There are Manna Bears...I still have some uneaten ones in my house:

http://i5.ebayimg.com/02/i/08/02/fa/61_2.JPG

They should develop a product called "Vulcan Bears".

studentofthemarket

10-25-2006, 02:07 AM

That business model cannot survive. Some discounter will always undercut it and it will have to morph or disappear. And it needs to disappear. :D

Well the main thing is that the "sellers" are all also the "buyers". Very few end users that I've ever seen.

I got suckered into going to a Ixtar(or whatever they call Internet AMWAY) meeting. What a load of crap that was. When asked what I thought of the program. I said "sounds like an internet based amway scam". Boooooyyy did they get torqued.

most important thing for a company. Have customers for whatever they're selling. Second? Have repeat customers. Just ask Peter Lynch :)
Third? make profits. and do so legally.

student

billyjoe

10-25-2006, 10:36 AM

Well the main thing is that the "sellers" are all also the "buyers". Very few end users that I've ever seen.

I got suckered into going to a Ixtar(or whatever they call Internet AMWAY) meeting. What a load of crap that was. When asked what I thought of the program. I said "sounds like an internet based amway scam". Boooooyyy did they get torqued.

most important thing for a company. Have customers for whatever they're selling. Second? Have repeat customers. Just ask Peter Lynch :)
Third? make profits. and do so legally.

student

Student and New-born,
Amway/Alticor/Quixtar/The Business has been peddling it's wares or distributorships since 1959. An FTC probe determined that 2 in 1,000 distributorships made $47,000 per year and 1 in 10,000 made $72,000 per year. I'll take stock market odds over that any day.
Also 80% of 6 billion revenues is foreign, mostly from China.
---------------billyjoe

New-born baby

10-26-2006, 10:40 PM

Student and New-born,
Amway/Alticor/Quixtar/The Business has been peddling it's wares or distributorships since 1959. An FTC probe determined that 2 in 1,000 distributorships made $47,000 per year and 1 in 10,000 made $72,000 per year. I'll take stock market odds over that any day.
Also 80% of 6 billion revenues is foreign, mostly from China.
---------------billyjoe
Thanks for the sobering information. What a bunch of CROOKS!

peanuts

10-26-2006, 10:55 PM

bsideindy

10-27-2006, 12:27 PM

Thanks jc4fun3 for you info on MTEX. Because of your postings I got a better idea of the nature of this company and stayed away. Wise move (at least today).

casinoboy3

10-27-2006, 12:40 PM

in at 15.50. stupid move? we'll see...

peanuts

10-27-2006, 12:54 PM

in at 15.50. stupid move? we'll see...

hey! nice pivot point buy!!!! Let's see if it works out for you. :)

Gatorper

10-27-2006, 04:48 PM

Texas Attorney General probing Mannatech

October 27, 2006 10:29:00 (ET)

SAN DIEGO (MarketWatch) -- The Texas Attorney General's office is investigating and has considered taking legal action against Mannatech, a fast-growing manufacturer of nutritional supplements, whose stock has been one of the year's sizzlers.

mrmarket

10-27-2006, 05:12 PM

alice4321us

10-30-2006, 07:34 PM

COPPELL, TX, Oct 30, 2006 (MARKET WIRE via COMTEX) --
MTEX today announced that the company had not been contacted by the Texas Attorney General's office regarding any investigations, in response to reports published on Friday, October 27, 2006. Mannatech stated that it is committed to continuing to work with any and all regulatory agencies that have an interest in the Company or its products. The Company believes that its compliance programs are taken very seriously by its employees and its associates and are a pivotal aspect of its continued success.

Tatnic

10-30-2006, 11:05 PM

I believe your chart says it all. Buy at the 200 day, not here. If the fundamentals haven't changed and Andrew Left hasn't focused on the company (or someone like him), then why not buy it when its on sale?

BTW...I have a couple of hunting buddies who drank the koolaid and sell this stuff. They are seemily intelligent guys but they actually believe the bs about "soil depletion" and how the stuff they peddle is the only thing that can replace those lost minerals and nutrients. ONe of them also claims that his little bout of impotence was cured by this miracle substance.

My understanding of the company is that its a classic pyramid scheme along the lines of avon, amway, etc. Nothing illegal about it but the company does push the envelope as witnessed by those court cases. And one could argue that wall street is nothing but a huge pyramid scheme and that the company has a great business model, ie they don't have to hire salesmen to push their snake oil. And we all know how well crap sells in this country with the right marketing.

Bottom line, the stock may do fine in the short-term (heck, in the longer term who knows?)

ps..its manna bars, not bears. The manna bears haven't shown up in numbers yet, but you don't want to be left holding the bag when Left does a little piece on this one.

I stand corrected, the bears have shown up.

casinoboy3

10-30-2006, 11:40 PM

New-born baby

10-31-2006, 07:40 AM

I do not read the news or balance sheets. I simply read the charts.
Below is the current read on MTEX (my view, of course). When MTEX came out in the top five, I said it was like the other charts in the five: a cup formation that will either make a handle and explode higher, or a double top and pull back. (Read about it here: http://www.mrmarketishuge.com/showpost.php?p=67329&postcount=3345). MTEX has done the latter. The recent precipitous fall was stopped at the $15 major support line. Yesterday's bounce was no surprise as a lot people were buying support. (Smart). They will have a stop loss at $14.90 or so. IF***IF that $15 line can hold--great. But should it break we are looking at $10-$11 again. Note the 200 week avg. that has acted as support in the last year. This thing could make another bear flag and fall down to the 200 week avg, at which time it would be another buying opportunity. I should also say that MTEX's 200 day avg is currently $15, so the bulls were stepping forward here.

My personal view is that MTEX will fall down to $10-$11 because the fall from $18 to $15 happened in one day. That usually means that another $3+ is coming off in the next 20 days or less. Look at the chart: it had a fall like this in May/June, and it was a great buying opportunity. It may make a double bottom here at $10.91, and a person could make 115%.

http://img507.imageshack.us/img507/4363/chart1ff6.gif (http://imageshack.us)

Tatnic

11-01-2006, 01:33 PM

I do not read the news or balance sheets. I simply read the charts.
Below is the current read on MTEX (my view, of course). When MTEX came out in the top five, I said it was like the other charts in the five: a cup formation that will either make a handle and explode higher, or a double top and pull back.

Note the 200 week avg. that has acted as support in the last year. This thing could make another bear flag and fall down to the 200 week avg, at which time it would be another buying opportunity. I should also say that MTEX's 200 day avg is currently $15, so the bulls were stepping forward here.

My personal view is that MTEX will fall down to $10-$11 because the fall from $18 to $15 happened in one day. That usually means that another $3+ is coming off in the next 20 days or less. Look at the chart: it had a fall like this in May/June, and it was a great buying opportunity. It may make a double bottom here at $10.91, and a person could make 115%.

http://img507.imageshack.us/img507/4363/chart1ff6.gif (http://imageshack.us)

so...did you trust your charts enough to take a position? I think any bounce here should be sold/shorted, but that doesn't mean the stock will immediately collapse either.

There's nothing fundamentally wrong with the company if one just looks at their numbers, but it helps to understand what it is that they do and they're time on the planet is limited IMO. All garbage must come to an end. Add IIG to that category...keep in mind that they have a conference call coming up soon and if history is any guide, that day is the day to go short. Nice run up over the past months to really set up that short.

Tatnic

11-01-2006, 01:37 PM

"An Oct. 24 memorandum in response to a public information request says the state's top cop has "anticipated filing suit against Mannatech" for a number of alleged violations.

The public information request was filed by someone who has sold short Mannatech's shares."

It's that last sentence that I found interesting. Of course someone who sold short MTEX wants to bring out bad news so the stock will drop. Is manipulating the stock like that legal? Maybe I'm misinterpreting.

This appears to be nothing new and I don't know if it's legit (i.e. to believe whether a suit will actually be filing- it's only "anticipation" at this point). Of course, the stock may drop and continue to do so, regardless of whether any of these allegations are legit.

Are you new to this? Why is what you described any different from ernie et al pounding the table on the company and sending out a huge mass spam mailing? If someone is disseminating fraudulent info in an effort to manipulate a stock price then that's most likely illegal (unless they have very good lawyers). I'm much more inclined to believe that this company is nothing but a snake oil outfit but that's just my personal opinion.

mrmarket

11-01-2006, 03:07 PM

Are you new to this? Why is what you described any different from ernie et al pounding the table on the company and sending out a huge mass spam mailing? If someone is disseminating fraudulent info in an effort to manipulate a stock price then that's most likely illegal (unless they have very good lawyers). I'm much more inclined to believe that this company is nothing but a snake oil outfit but that's just my personal opinion.

Note in my write up that I never professed that their products were effective. What I DID note was that the company was growing their revenues and earnings AND that people were buying Mannatech products.

New-born baby

11-01-2006, 04:55 PM

mrmarket

12-18-2006, 06:13 PM

Nice little pop today...I don't think $10 is in the cards. Do you?

stripesound

12-19-2006, 01:57 AM

The chart does not look good to me. It could work but this feels like a crap shoot.

Some reasons for hope in the future but recent performance has not been inspiring. I have no good reason to doubt the future story but in my opinion these stories are a 'dime a dozen'. Managment talks a lot about things they "believe" will happen. This isnt worth my hard earned $$$.

mrmarket

12-19-2006, 08:27 AM

New-born baby

12-19-2006, 08:56 AM

Nice little pop today...I don't think $10 is in the cards. Do you?

Congrats on the nice little pop. Chart is not yet bullish but will be with another good day today. Yesterday was HUGE for MTEX. It ended the day right up against resistance. Now if she busts through that today, then yes, this may be your AXR type turnaround.

mrmarket

12-19-2006, 10:07 AM

Congrats on the nice little pop. Chart is not yet bullish but will be with another good day today. Yesterday was HUGE for MTEX. It ended the day right up against resistance. Now if she busts through that today, then yes, this may be your AXR type turnaround.

What's particularly impressive is the way the buyers shrugged off the threat of the law suit. If this company really is selling snake oil...and there's no proof that it isn't, that lawsuit should have been a killer. But as PT Barnum said...

Tatnic

12-19-2006, 11:00 AM

Congrats on the nice little pop. Chart is not yet bullish but will be with another good day today. Yesterday was HUGE for MTEX. It ended the day right up against resistance. Now if she busts through that today, then yes, this may be your AXR type turnaround.

it all depends on where it closes at the end of the week. You may have a ball breaking short squeeze, but its too early to call it yet. If I were short, I'd be sweating bullets right now.

New-born baby

12-19-2006, 11:05 AM

Tatnic

12-19-2006, 11:13 AM

MTEX got a stock buy-back program going on? Perhaps they bought their own stock all at once yesterday to get this thing moving North again. That would put the squeeze on the short sellers, and help move the stock up even more. But a move like that won't hold forever.

at 3:45 pm on friday, check the price. If its above 15.5 then I'd say its a go. If its not, then wait. Its that simple.

Tatnic

12-20-2006, 08:32 AM

at 3:45 pm on friday, check the price. If its above 15.5 then I'd say its a go. If its not, then wait. Its that simple.

correction...that should read $15.55 on Friday's close, not 15.5.

Tatnic

12-20-2006, 08:33 AM

correction...that should read $15.55 on Friday's close, not 15.5.

and don't forget about the huge overhead resistance with this one...

Tatnic

12-29-2006, 01:07 PM

and don't forget about the huge overhead resistance with this one...

not looking good or bad for this one...if enough people get bored with it, it could collapse. I don't see enough downside to warrant my attention, but if one were to short it I'd like to see a break below 14.

mrmarket

01-30-2007, 12:48 PM

nice little surge today!

mrmarket

05-07-2007, 01:56 PM

up 9% today on earnings...go baby go!

jc4fun3

05-30-2007, 05:22 PM

Down almost 10% day after news broke of negative 20/20 program airing this Friday. Here is an article on it:

Sunshiny Market Still Offers a Short Play
By Steven Smith
Senior Columnist at TheStreet.com
5/30/2007 12:06 PM EDT
URL: http://www.thestreet.com/p/rmoney/stevensmithblog/10359604.html

Apparently, Mannatech (MTEX) will be receiving some bad publicity later this week on ABC's 20/20 (which has already posted a video (labeled Magic Pill on its site http://abcnews.go.com/2020) that could send the stock down sharply.

Skeptics have had this company in their crosshairs for quite a while. The short ratio is 27% of the float, putting Mannatech in the top 15 shorted stocks. Shorts claim that Mannatech's nutritional supplements are placebos at best and that its business model is a pyramid scheme.

The last time the company was put under the microscope by mainstream media was last October, when Barron's ran a negative article. The stock subsequently fell some 25%, from $20 to $14, within the next week.

mrmarket

05-31-2007, 07:18 AM

mrmarket

05-31-2007, 11:06 AM

This is nothing new. Let's see what happens.

Based on today's market action, it looks like the market has seen this before also....

stripesound

07-06-2007, 03:57 PM

doesnt look good, shorts are vindicated here.

mrmarket

07-06-2007, 04:00 PM

doesnt look good, shorts are vindicated here.

You may be right, if MTEX ever stops making money, which they haven't.

jiesen

07-06-2007, 04:58 PM

didn't want to happen quite like this, but my old limit order for MTEX was filled today at 13.1. I'm doubling down here to a 3% position.

New-born baby

07-06-2007, 05:06 PM

didn't want to happen quite like this, but my old limit order for MTEX was filled today at 13.1. I'm doubling down here to a 3% position.

I always wish Jiesen well, but I have to say that I couldn't trade with you on this one. Today's triple bottom breakdown signals a fall to at least $8.50, and very possibly lower. In fact, if I wanted this one, $8 looks to be the place to enter. Ugly chart to say the least. What do you need to get out of this one alive?

Best wishes with it, Jiesen. Why not use the option chain to buy some puts on this one?

jiesen

07-06-2007, 05:47 PM

I always wish Jiesen well, but I have to say that I couldn't trade with you on this one. Today's triple bottom breakdown signals a fall to at least $8.50, and very possibly lower. In fact, if I wanted this one, $8 looks to be the place to enter. Ugly chart to say the least. What do you need to get out of this one alive?

Best wishes with it, Jiesen. Why not use the option chain to buy some puts on this one?

I'm looking for about $20, same as when I bought it at 17.7. As it's a 3% position for me, I'll still be alive and kicking even if it drops to 0 ala BEL. Haven't given any thought to options on this, and don't really plan to.

mrmarket

05-18-2008, 06:11 PM

Mannatech Inc. (MTEX)

Q1 2008 Earnings Call

May 12, 2008 10:00 a.m.

Executives

Terry L. Persinger - Chief Executive Officer and President

Stephen D. Fenstermacher – Chief Financial Officer

Gary M. Spinell – Vice President of Finance and Investor Relations

Analysts

Brian Alger – Strata Capital Management

James Mount – Multi-Financial Security

Peter Park - Park West Asset Management

Presentation

Operator

Greetings and welcome to the Mannatech Inc. First Quarter 2008 Earnings Conference Call. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Terry Persinger, President and CEO of Mannatech. Thank you. You may begin.

Terry L. Persinger

Good morning and thank you. This is Terry Persinger, President and CEO of Mannatech, and I welcome you to our First Quarter 2008 Earnings Conference Call. With me today are Steve Fenstermacher, Chief Financial Officer, and Gary Spinell, Vice President of Finance and Investor Relations. Before we discuss the quarter, I’ll turn the microphone over to Gary Spinell to read the Safe Harbor Statement.

Gary M. Spinell

Thank you, Terry. During this conference call, we may make forward-looking statements, which could involve future events or future financial performance. Forward-looking statements generally can be identified by the use of phrases or terminology, such as will continue, may, believe, intend, expect, potential, should and planned or other similar words or the negative of such terminology.

We caution listeners that such forward-looking statements are subject to certain events, risks, uncertainties and other factors and speak only as of today. We also refer our listeners to review our SEC submission. Thanks and now I’ll turn the call back over to Terry.

Terry L. Persinger

Thanks, Gary. As we reported last Friday, first quarter sales and earnings were below last year’s first quarter. The continuing soft sales and recruiting trend began in mid-2007 partly due to the Texas Attorney General’s announcement of litigation. Sales and recruiting have also been impacted by our year-long transition to a new business development system that repositions our company at the forefront of the wellness industry.

Although we are disappointed with the current sales and earnings performance, we have made additional progress since our last call in addressing the issues and repositions the company for long-term growth.

Our balance sheet continued to show essentially no long-term debt, and for March 2008 we showed more than $60 million in total cash and investments. Sales in the quarter were $91.5 million, 12.7% below first quarter 2007 sales of $104.8 million.

The shortfall occurred in our domestic business, which was more deeply impacted by the overhang of negative publicity and ongoing litigation as well as the weakening domestic economy and the changeover to the new business development system. Domestic sales, which include the U.S. and Canada, declined 23% versus first quarter 2007.

In the same period international sales grew 14% over prior year, reflecting growth primarily in our Asian markets. Sales in the Republic of South Korea were up almost 50% a year ago, while Japan sales were up over 17% in the first quarter of 2008 compared to the same quarter in 2007. Australia was up slightly and is moving in a positive direction after over a year of soft sales.

For the first quarter 2008, we reported a loss of $2.3 million versus a first quarter 2007 net income of $6.9 million. On a pretax basis the first quarter of 2008, we reported a loss of $2.8 million compared to pretax income of $10.4 million for the same quarter in 2007. The loss per share was $0.09 in the quarter compared to $0.26 diluted earnings per share in first quarter 2007.

Net income was impacted by higher marketing and IT expenses along with higher depreciation expense. We made progress in reducing the base expenses compared to the fourth quarter of last year. However, operating expenses were up year over year due to the end-of-quarter launch of our new business development system and associate marketing materials. Steve Fenstermacher will discuss this in greater detail later.

Total independent associates and members at the end of the first quarter 2008 were 570,000 based on a trailing 12-month period. This was a year-over-year growth of 3.1% or an increase of 17,000 independent associates and members versus the first quarter of 2007. Continuing associates and member were up 10.1% or an increase of 36,000.

New recruits were down 9.6% predominantly in the domestic market. As I stated earlier, domestic recruiting has been impacted by the overhang of litigation along with the transition to a new business sales system end of quarter. As the first quarter ended, we announced a settlement in the class action litigation pending court approval.

We continue to be actively engaged in discussions with representatives of the Texas Attorney General’s office, which we believe have been productive. We expect these discussions to continue and ultimately provide the framework for resolution of this matter. Of course, we are still in litigation, and there are no assurances in litigation.

Also, this morning we announced that a federal court jury validated our glyconutrient patent by finding GlycoProducts International infringed Mannatech patent and trademark related to Ambrotose. We are extremely pleased by these outcomes and will continue to vigorously defend our technology and cutting-edge research and development in the groundbreaking field of glyconutrients.

We have 45 registered patents around the world, 5 in the U.S. and 40 internationally, and we have an additional 85 patents pending worldwide. We believe these favorable rulings reinforce our leadership position as a developer and provider of high-quality nutritional supplements. This, along with the class action food settlement, is very positive for our business associates and will help propel our business forward.

On our last call we discussed the key initiatives we are taking to address both the current performance issues and to position the company for long-term growth. Although it is too early to see the impact of our completed initiatives, we are making progress towards repositioning our company at the forefront of the wellness industry.

Building a global business development system requires that we provide our associates with the appropriate business materials and an infrastructure to support the new system. The goal is a global reproducible business system to provide steady growth on a global scale. We have completed major building blocks over the last year to enable future growth.

In early 2007 we launched our ERP system GlobalView, enhancing our global seamless downline commission capability to support existing international operations as well as further expansion. Last summer we implemented the initial phase of our wellness repositioning by directing all associates to discontinue usage of third-party materials and testimonials. And at the same time, we instituted 180-day satisfaction guarantee.

In October we subsequently enhanced our new business development system with the launch of a sales program called Ready, Set, Go. Earlier this year, we completed the next phase, which introduced a web redesign. This initiative is part of an ongoing goal to continually provide associates with state-of-the-art business tools.

The culmination of these efforts took place in March at our annual convention MannaFest. We announced the availability of the new materials as part of our global business development system. These materials are to be used in conjunction with our sales and marketing strategy Ready, Set, Go, Give, which emphasizes an outreach to potential customers with product samples.

We believe many new customers who become familiar with Mannatech products will join thousands of associates whose orders are on automatic shipment basis. In addition if customers are not satisfied, our new satisfaction guarantee allows them to feel comfortable that any unused product can be returned for up to six months after purchase for a full refund.

We also announced the global availability of our Optimal Skincare System and the launch of a new wellness product BounceBack. This supplement is an all-natural product that supports recovery after physical activity or overexertion.

Going forward, we believe that the new business development system will drive recruiting and reverse the decline in sales. Associates are now better equipped to not only present information on our proprietary products but also to detail the unique and attractive business opportunity Mannatech offers.

Mannatech combines one of the highest commission rates in the industry with proprietary leading-edge wellness products in a seamless downline commission structure. This business development system highlights the opportunity for potential income, which is particularly relevant in today’s weak economy.

In addition our new system strengthens the long-term earning opportunity. With the launch of our global system, we look to the remainder of 2008 to focus on four priorities. Number one is regaining sales and recruiting momentum in our domestic market; number two, restoring profitability through cost reduction; number three, integrating the new business development system throughout our associate downlines; and number four, geographic expansion.

I’d like to review each of these in a little more detail. While the business development system is being rolled out, our annual global travel incentive, which will come to a close at the end of May, is focusing on regaining sales and recruiting momentum. As associate excitement builds to meet the required travel goals, we are considering launching another domestic incentive program in June. We have found that incentives do work.

Now that the cost related to the new business system and manifest are behind us, our next priority is profit improvement. We are aggressively reviewing operational expenses across the company. At the same time, we are working to improve our gross profit margin.

Our focus in the next few quarters will be to work with our associates to fully integrate the new business development system throughout their downlines. We are pleased that the new system and support materials have been well received by associates, but as is always the case, integration throughout extensive associate base will take some time. We are currently conducting launch and follow-up activities in various locations as we roll out the new program.

And last as with the GlobalView system fully operational, we are now turning our sights towards geographic expansion and just announced the opening of South Africa last month. This market has a rich tradition of using nature’s biodiversity to help address quality of life and optimal health. We are in the midst of staging launch activities that will continue for a couple more weeks. The response last week has been great with several thousand having attended meetings throughout the country.

In addition to these initiatives and as an update, our CEO search continues as our Board has been actively interviewing well-qualified candidates. I will now turn the call over to Stephen Fenstermacher, our CFO. Steve?

Stephen D. Fenstermacher

Thank you, Terry, and good morning, everyone. The first quarter results for both sales and operating earnings were again below last year and also failed to achieve our expectations. Our deficit of $0.09 per share improved from the fourth quarter of 2007 by about 30% with Q4 posting a loss of $0.13 per share.

We spoke in the last earnings call of the reserves, which related to several pieces of litigation in Q4. The first quarter 2008 deficit, however, largely reflected the decreased level of domestic sales and recruiting, which was experienced over the last three months.

Despite the reduced operating earnings in the quarter, our financial condition remains strong. Our balance sheet continued to show essentially no long-term debt, and for March 2008 we showed $58 million in cash.

The continuing slow sales pattern in North American could have been expected to cause some distortion in our product cost rate, but instead we were able to control our supply chain cost rate to the more normalized level we achieved in the fourth quarter of 2007.

Our cost-of-goods-sold rate was lowered to 14.1% for the quarter, essentially even with the 2007 prior year three-month period. Our product cost rates in the middle two quarters last year were elevated due to customer satisfaction-relation product giveaways and reserves caused by problems encountered with certain skincare items.

The rate in the fourth quarter saw a return to a more normal level, which has continued into 2008. We now have our skincare products manufactured in Japan for sale here in North America and were pleased with the initial sales reaction of our associates since the reintroduction of the skincare line during this first quarter.

Commission and incentives expense was 46.4% in the quarter, which was down slightly from the 2007 fourth quarter but was up 1.6 percentage points compared to the 2007 first quarter. Accrued travel incentive costs were essentially even with last year in rate while paid commissions were responsible for the overall increase.

Paid commissions rose in rates of sales reaching 43.3%, which as higher than last year by 1.6 percentage points. The increase reflected changes in the overall product mix, the proportions of sales generated from each country and the mix of pack sales and product sales as well.

We stage our Global Associate Travel Incentive qualifying period each year beginning in January and ending in mid-May, during which our independent associates can win great travel packages by increasing their Mannatech businesses above specific growth hurdles. We accrue the expected cost for these trips during the first and second quarters during qualification, so these two quarters usually show heavier incentive charges when compared to the second half quarters.

Incentive costs were 3.1% of sales in Q1, which was even against 2007. Each operating region around the world participates in the travel incentive, and each region hosts their associate winners at a specific regional resort as their prize. These travel incentives have become very popular with our associates and can usually be counted upon to generate a greater excitement level as well renewed business growth activity.

Total operating costs of $39.8 million accounted for 43.6% of sales. This rate in total was 11.8 percentage points above last year or $6.5 million. Depreciation from the new GlobalView system increased by about $1.6 million and was 3.3 percentage points in rate.

Compared to last year, staff costs were up over $1.1 million due to the unfavorable variance in internal salaries, which in Q1 of 2007 were still capitalized due to the ongoing configuration work on the GlobalView system.

Contract work, mainly on the system and several consulting projects in our sales and marketing area, also resulted in cost increases from last year as well. The cost of development of Go-Give, our new business development system, was largely contained in the quarter and involved considerable internal assets as well as significant outside consulting expense deployed against the project.

We hold our annual global associate event here in Dallas/Fort Worth each March called MannaFest. This event gathers together Mannatech associates from around the world and provides a forum to discuss with them new products and plans, which have been prepared by the company.

We utilized this opportunity to provide specific training and background to our associates concerning the new business development system entitled Go-Give. As Terry explained, this concept allows and encourages our independent associates to show and demonstrate the products offered by Mannatech to people who are interested in supplements and possibly the business opportunity as well.

This concept folds product demonstration and explanation into the ability to give gifts of product samples to interested people in a manner which fits the giving philosophy of Mannatech and also can create a welcome experience for the associate as well as the recipient of the gift.

We believe the concept and related materials were well received by the associate as we are pleased with the initial reactions in the field. It is too early to gage the impact but we have been impressed with the level of enthusiasm expressed by our associate leaders concerning the program.

Manifest carries a considerable cost into each first quarter and this we developed some new designs for the events to concentrate a attendee interest on specific subject. This involved additional costs as we added significantly to the event on a year to year comparison. We consciously planned to make Manifest 2008 the best event we have ever staged. We are looking forward to see how the new business development systems blooms and impacts the business over the remainder of 2008.

In addition we had increased professional costs in several categories. Higher audit expense was due to the timing of the engagement of BDO Seidman as our independent external auditors in the fall of 2007. And higher consulting costs in the IT area as last year most of these types of expenses were eligible for capitalization.

However, legal costs decreased compared to the first quarter of 2007. You may recall that we announced the settlement of the class action lawsuit in late March. We are looking forward to completion of the other suit involving the company and moving forward to address the challenges of growing the business on a global basis.

Our pre-tax loss of $2.8 million was related to all of these factors previously discussed and was 3.1% of sales falling from the $10.4 million pre-tax profit of a year ago. EPS was a deficit of $0.09 cents per share based on the net loss after tax figure of $2.3 million.

Once again our balance sheet in March was still strong with $58 million in cash and essentially no long-term debt. Our financial position is strong with equity continuing to comprise the bulk of our capital structure.

Our ending inventory grew about $2.3 million to $26.1 million reflecting two items. First the product samples and related materials for the go gift program arrived in late March to coincide with the launch at Manifest. And also our domestic skin care product re-launch kicked off in February with fresh, new inventories manufactured in Japan.

Our supply chain staff was again successful in limiting inventory investment in our other established products through continued work against product lead times and good flow estimation processes. We will continue to focus on this project throughout 2008.

We paid a dividend of $0.09 cents per share during the quarter which was about $2.4 million in cash usage. And also in April our board declared our 17th dividend payment again for $0.09 cents per share for which the date of record is June 5th, 2008. The payment dates for the dividend is June 26th, 2008. Mannatech intends to encourage long-term ownership of its stock to our continue dividend program.

We did not purchase shares in the market during the first quarter. We have an open to buy allotment of $20 million from the board so that under certain market conditions we may engage in additional repurchases. Recent events have constrained us from going into the market for stock buy backs.

In summary we acknowledge that we do have continuing challenges in the North American market related to sales and associate recruiting. And also that we have additional challenges related to our operating costs in some areas.

However, we feel that a significant step was taken in the first quarter concerning our legal issues with the settlement of the class action suit. And we have begun the new go give business development system which should be rolled out in the rest of our markets around the world by the fourth quarter 2008. Thanks for listening to our call. And now Terry has some wrap up comments.

Terry Persinger

Thank you, Steven. Although we are not satisfied with the current results we have made significant stride in the turning the corner by creating a business development system that strengthens our associate business opportunity. At the same time the repositioning of our business addresses the ever growing consumer demand for optimal and wellness products.

The new system is now in the hands of our associates and our goal is to help them fully integrate this program into their day-to-day business activities. We are confident that this new model lays the foundation for future growth. We know all this will take some time. I have every confidence that our management team and associates will continue to drive the necessary initiatives to generate growth and improve our ability to return value to our shareholders.

Thank you for your continued support and participation. Now I will turn the call over for questions.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen at this time we will be conducting the question-and-answer session. (Operator Instructions) Our first question comes from the line of Brian Alger with Strata Capital Management.

Brian Alger – Strata Capital Management

Good morning guys. Thanks for hosting the conference call.

Terry Persinger

Good morning.

Brian Alger – Strata Capital Management

A number of questions, I guess first on the cash flow side of things. Obviously a tick down, I am curious in terms of prioritization of managing the cash, are we looking at continuing the dividend basically regardless? And if that is the case do we take precedence or preference to that over reducing costs whether that is through lowering commissions or internally?

Stephen D. Fenstermacher

Well specifically I will address a comment that I made in the body of our presentation. The company and the Board of Directors believes that dividend payment is important and continues to stress dividend payment. We have become very regular with our dividends and the intent of the board under normal operating conditions, I believe is to continue with payment of dividends.

In terms of contrasting dividend payment to other opportunities for the company, I do not think there is really a comparison there. We want to continue to work to make our operating numbers much more efficient. We have had specific projects to address over the course of the last year.

And the depreciation from the new system is now annualizing in our second quarter. And obviously that is not a direct cash situation but we do intend to make our operating numbers more efficient on a continuing basis. And we believe that we are making good progress towards the additional consulting costs that have been necessary and moving those out throughout the remainder of 2007. Okay?

Brian Alger – Strata Capital Management

Yes that was hopeful. And I guess looking at the sales decline year on year, obviously a lot of things have occurred since first quarter of ’07 and I know it is difficult to quantify. But maybe if you could take a stab at it, how much of the decline in North America, I think you said it was a little over 20% year on year, how much of that decline do you think it is attritable to the lawsuit from the Texas AG versus how much is due to swelling economy and people having less disposable income to spend on supplements?

Terry Persinger

Well, this is Terry Persinger. You are right. It is hard to quantify. But you need to remember that these are independent self-directed associates whose confidence in what they are doing and in the company is very, very important. So it is hard to quantify the effect of the attorney general effort. But it is has been very, very large. The economy influences are probably building as we speak. So it is hard to give you a percentage between the two but I think both are a factor.

Brian Alger – Strata Capital Management

Okay. So maybe as the Texas AG issue winds itself it down, we probably still need to be cognitive of what is going on in the economy?

Terry Persinger

Oh yes I think so.

Brian Alger – Strata Capital Management

Okay. And one last one guys if I might. You mentioned that there was a number of recent events that prevented you from buying back shares. Can you maybe tell us what those events were?

Stephen D. Fenstermacher

Well, I cannot go into specific detail but obviously with having several pieces of litigation going on concurrently there are situations which the company is aware of that the normal investor would not be aware of. In those cases we are treating our situation very conservatively and hopefully as things wind down we will be able to address that situation in the market.

Brian Alger – Strata Capital Management

Great, guys thanks for answering the question.

Stephen D. Fenstermacher

Thank you.

Operator

(Operator Instructions) Our next question comes from the line of James Mount [ph] with Multi-Financial Security [ph].

James Mount – Multi-Financial Security

Thank you. Good morning. My question is on the go giver program and the third party tool, did I understand that you have taken third party tools out all together or are they still being reviewed by the company or like to [Inaudible] back or what is the deal on that?

Terry Persinger

I actually meant to say that certain third party materials are taken out. I noticed when I went over the body of it I left that out. So we are evaluating certain third party materials and also greatly increasing the materials that we produce in house to support the go give concept. Throughout this, this is a huge exchange for us.

But it gives us the opportunity to make sure that we have a congruent sales program worldwide. Because we are finding that it is just huge because – for instance. We have a number of Korean associates on the West Coast and throughout the United States. When you consider that the approaches in both South Korea and United States have to be coordinated better. So this can have a huge impact on our business.

James Mount – Multi-Financial Security

Okay so those are still allowed then as long as the company has reviewed them, is that basically what I am hearing you say?

Terry Persinger

That is correct. As long as we have review and certify them.

James Mount – Multi-Financial Security

Okay, thank you.

Operator

(Operator Instructions) Our next question comes from the line of Peter Park with Park West Asset Management.

Peter Park - Park West Asset Management

Hi. Can you give us a sense of what the impact of currency was on your sales and margins? Thanks.

Stephen D. Fenstermacher

Yes this is Steve. On a net basis we had very little impact of currency in the quarter. We are operating in a sufficient number of international market that, these days, with the movements of many different currencies both up and down we are not specifically under the influence of one change or another versus the dollar. So it was relatively small for the quarter.

Peter Park - Park West Asset Management

Do you have it in numbers? Because you are obviously in a lot of different geographies.

Terry Persinger

Yes that is an item we have not disclosed specifically.

Peter Park - Park West Asset Management

Was the impact of currency positive as it relates to your impact on sales? Because I think the US dollar is weaker against most of those currencies.

Terry Persinger

Yes it was favorable by relatively small amount.

Peter Park - Park West Asset Management

Okay. Thanks.

Terry Persinger

Thank you.

Operator

(Operator Instructions) Seeing as there are no further questions I would like to turn the call back to management for any concluding remarks.

Stephen D. Fenstermacher

We just want to thank everyone for their participation and for their clarifying questions and we look forward to the next quarter and the next call.

Operator

Ladies and gentlemen, this concludes today’s teleconference. Thank you for your participation.

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