CEO Interview: Mannatech, Inc. - Wayne L. Badovinus

• On 1:31 pm EST, Monday November 2, 2009

67 WALL STREET, New York - November 2, 2009 - The Wall Street Transcript has just published its Pharmaceuticals Report offering a timely review of the sector to serious investors and industry executives. This 76-page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Small-Cap Specialty Pharma - Patent Expiration - Pending Health Care Reform - Cultivating And Expanding R&D Pipelines - Chinese Drug Manufacturers - Brisk M&A Activity - Indian Pharma VS. U.S. Pharma - Competition From Generics - FDA Approval Process - Clinical Research Outsourcing Market - Stem Cell-Based Technology - Cancer Radiation Therapy - Expansion Into Asian Markets - Traditional Chinese Medicine VS. Western Medicine In Chinese Pharma

Companies include: Aeolus Pharmaceuticals (AOLS.OB); Nutra Pharma (NPHC.OB); Quick-Med Technologies (QMDT.OB); Abbott Labs (ABT); Alexza Pharmaceuticals (ALXA); AmexDrug Corporation (AXRX.OB); Aurobindo Pharma (AUROBINDOP.BO); BioClinica (BIOC); BioPharm Asia (BFAR.OB); Biocon (BIOCON.BO); Cephalon (CEPH); China Sky One Medical, Inc. (CSKI); Claris Lifesciences (CLARICH.BO); Cortex Pharmaceuticals (COR); Daiichi Sankyo (DSKYF.PK); Dr.Reddy's (RDY); Elan (Elan); Eli Lilly (LLY); Forest (FRX); GeoPharma (GORX); Glaxo (GSK); Glenmark (GLENMARK.BO); Johnson & Johnson (JNJ); Lupin (LUPINSL.BO); Mannatech (MTEX); Matrix Laboratories (ATRIXLAB.BO); Medical Nutrition (MDNU); Merck KGaA (MKGAY.PK); Mylan (MYL); NeoStem (NBS); Novartis (NVS); Pfizer (PFE); Piramal Healthcare (PIRAMALHE.BO); Provectus Pharmaceuticals (PVCT.OB); Ranbaxy (RANBAXY.BO); Salix Pharmaceuticals (SLXP); Shire (SHPGY); Telik (TELK); Winston Pharmaceuticals (WPHM.OB).

In the following brief excerpt from the 76-page report, Wayne L. Badovinus, CEO of Mannatech, Inc., discusses the outlook for the sector and for investors.

WAYNE L. BADOVINUS joined Mannatech, Inc., on June 16, 2008, as President and Chief Executive Officer. On June 19, 2008, he was appointed as a Class III Director on the Mannatech board, on which he will serve a three-year term. Mr. Badovinus has 43 years of experience in consumer brands, and has held senior management positions with a number of retail/department stores and catalog companies, such as Eddie Bauer, Acme Boot Company, Design Within Reach, Williams-Sonoma and Nordstrom. He has served as Chairman of the boards of Country Home Products, NapaStyle and Chefs Catalog. Additionally, he has served on the public company boards of The Vermont Country Store, Gardner's Supply, Autumn Harp, N.E.O.S. and Design Within Reach. Wayne received a B.A. in business administration from the University of Washington, Seattle.

TWST: Let's start with a brief overview of the history and evolution of Mannatech.

Mr. Badovinus: Mannatech (MTEX) was founded in 1994 as a result of scientific research that was done on aloe vera saccharides in the 1980s, and the discovery of the application to the structure and function elements in the human body. Specifically, we're talking about plant-sourced polysaccharides, also known as glyconutrients. These compounds are demonstrating powerful effects on human well-being, particularly immune, digestive and cognitive functions. Mannatech was among the first dietary supplement companies to recognize and capitalize on glyconutrient technologies. Today we provide products that offer solutions for health, weight and fitness, and skin care. The business has always been based on the fundamental issue of science framed within the broader market of wellness. Mannatech employs a multi-level marketing strategy of distribution to the wellness industry, which many are predicting will become a trillion-dollar business in the near future. So we've got a strong history in science, a strong marketplace to work in, and we are gaining traction and excited about where we are.

TWST: Would you explain the make-up of your customer base and who your direct competition is today?

Mr. Badovinus: Let me address our customer base first. Our customer base is primarily comprised of people who are interested in products that are natural, enhance their sense of wellness and support the ability of the normal functions of the body to take place. What I mean by that is our products assist the normal processes of the body through good nutrition and are all science-based. The result is that people typically use these products for their own wellness-related purposes first. They are so pleased with the results that they become independent sales associates and begin building a business based on the sale of our products. So our associates are a combination of product-users and product-users who have evolved into business-builders. And today we have more than 500,000 associates and consumers worldwide. Now in a general sense, the competitive environment is very broad. As you are aware, there are health food stores in virtually every mall, and drug stores and discount stores have a wide range of products for sale. However, we feel our product differentiates itself from the competition in terms of what we call Real Food Technology solutions, meaning our products are derived from real food sources. Ingredients and food sources are chosen from those scientifically proven to have the most beneficial outcome to the human body. So it's a broad marketplace in terms of the competitive set. But it's also a broad marketplace in terms of its potential.

TWST: As you look ahead over the next several years at the way your markets are developing, what specific trends do you see emerging? What will you turn your focus to in order to steer Mannatech down the road?

Mr. Badovinus: It's very important to recognize that the marketplace is coming our way. For the first few years in the business, we had to educate people about why it was worth spending their money to stay well. In others words, the mindset was, "I spend money when I'm ill, I don't spend money when I'm well." That general perception is changing. People are increasingly interested in wellness as a means of controlling medical expense and as a means of just feeling better in general. People are also recognizing that modern, commercial farming practices may not provide the nutritional value of foods they might have in the past. And so the big trend in the marketplace is the emergence of wellness as a top-of-mind consideration. We feel that's an important trend, which we are on top of. Obviously, there are some other trends that have to do with the continuing Research and Development on new products that we want to stay on top of, but the primary trend that we are concerned with is this general societal switch to an awareness of the benefits of maintaining wellness.

TWST: Is the company as well positioned as you would like it to be to effectively follow through on available opportunities?

Mr. Badovinus: Mannatech is very well positioned. The balance sheet is relatively strong and actually we have no long-term debt at all. So we feel that we are in a good position to take advantage of the opportunities that are in front of us. We see improvement in sales trends as we go into the short-term years, 2010, 2011, 2012. We have good opportunities for growth and are very well positioned in terms of expense. So we feel that from a technical Profit and Loss balance sheet standpoint, we are very well positioned to take advantage of these opportunities.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 76-page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

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