2 0 0 6 S H A R E H O L D E R S ' A N N U A L R E P O R T W E L L N E S S S H A P I N G T H E W E L L N E S S I N D U S T R Y TABLE OF CONTENTS Letter to Shareholders’ Shaping the Opportunity of the Wellness Industry Shaping the Science of the Wellness Industry Shaping the Future of the Wellness Industry Financial Strengths Corporate Information Board of Directors 2-5 6-9 10-13 14-17 18-19 20-21 22 SELECTED FINANCIAL DATA Results of Operations: Net sales Gross profit Income before income taxes Net income Earnings Per Share: For the year ended December 31, 2004 2005 2006 (in millions,except per share information and ratios) $295 $117 $27 $20 $389 $159 $46 $29 $410 $169 $48 $32 Basic Diluted Weighted-average common shares outstanding: (in thousands) Basic Diluted $0.74 $0.71 $1.06 $1.03 $1.22 $1.19 26,436 27,491 26,990 27,771 26,598 27,219 Financial Condition: Total cash and investments Total working capital Total assets Total shareholders’equity Cash flows from operations Statistics: Current ratio Inventory turnover ratio Debt to equity ratio Dividends paid per share $61 $28 $98 $56 $30 1.7 4.3 0.8 $0.20 $73 $38 $123 $70 $43 1.8 3.5 0.8 $0.28 $71 $29 $152 $89 $40 1.6 2.7 0.7 $0.32 We believe our strategy has provided us with the proven ability to discover,create,and deliver a synergistic line of high-quality,proprietary products that are heavily focused on consumers who desire to achieve and maintain optimal health and wellness. N N A T EC N N A T EC H H A A M M WE L L N E WE L L N E S S S S It has been predicted that by the year 2010,consumers will purchase $1 trillion of products and services that focus on health and wellness. The implications of the population shift towards a more proactive wellness lifestyle are far- reaching,from health and beauty to diet and exercise. Dear Shareholders, 2006 was a pivotal year for Mannatech as seasoned executives and the the Company put in place new products, establishment of a proactive Investor new initiatives,and new systems to sustain Relations program which generated growth in the years ahead.We once again increased investor awareness.This was achieved record sales and earnings evidenced by the Company being named despite challenges.Sales reached #5 by Forbes in its list of “Best 200 $410 million with diluted earnings per share of $1.19.Our commitment to return value to our shareholders We worked diligently to add the final touches to our products, and programs for the next step in our future. Small Companies”list,and the addition of MTEX stock to both the Russell Small Cap 2000 trading index and the S&P resulted in over a 15% increase in SmallCap 600 index. earnings per share combined with the Key to our future growth,we embarked continuation of our dividend and share upon the process of repositioning the buyback programs.In 2006,we announced Company,moving from a single-product the second dividend increase in two years focus as a leader in glyconutrients to a and used $7 million in cash to repurchase leader in the Wellness industry with a almost 541,000 of our shares. portfolio of innovative products that Our senior management staff was combine technology and natural strengthened with the addition of four ingredients to support optimal health and 2 wellness.Today,more than ever, food chain is deficient in the main nutrients there is heightened consumer interest in needed for wellness - vitamins,minerals, natural nutrients and alternative solutions glyconutrients,and antioxidants - and that to achieving and maintaining wellness. the average diet compounds the problem. Since inception,Mannatech’s mission Science has also shown that,just as our has been to design products that bodies need essential fatty and provide the highest quality nutritional and natural product ingredients and to We believe our ongoing scientific research will continue to validate what we have observed. amino acids,they also require eight vital sugars to support optimal health and introduce those products that wellness.These eight sugars are provide unique and proprietary found in chains formed on the surface benefits. around every cell in the body and act as a Beginning with the 1996 introduction of high-speed information highway for cell-to- our proprietary ingredient Ambrotose® cell communication,facilitating all sorts of complex,Mannatech has been the processes from immune system response to acknowledged authority in glyconutritional tissue regeneration and cell replication. supplementation that provides vital sugars Glycobiology,the study of how sugars to support optimal health and wellness. affect biological structures,functions and Science has established that the modern processes,is a relatively new science. 3 N N A T EC N N A T EC H H A A M M WE L L N E WE L L N E S S S S NET SALES (in millions) $410 $389 $295 $191 2003 2004 2005 2006 Mannatech is conducting research new product segments,phytonutrients and attempting to validate the body’s ability to skin care,with two industry “firsts”: utilize a dietary supply of these sugars to PhytoMatrix™,an all-natural vitamin and support proper immune system function mineral supplement,and Optimal Skin Care and recently established a grant for System,the first skin care regimen with no independent research.The Health preservatives.Unlike synthetic and Medical Research Center will analyze an extensive database of more than one million aging and immune-related biomarkers to determine the Our new ERP system will help offer our independent Associates a true global opportunity for customer acquisition. vitamins,PhytoMatrix™ utilizes 100% plant- sourced minerals and standardized phytochemicals and is the only supplement of its kind available on relationship between changes in these the market today.Our Optimal Skin Care measurements and the consumption of System is water-based,preservative-free glyconutrients.In the meantime,thousands and uses a proprietary new enhanced water of our independent Associates continue to technology to greatly improve skin re-order our products based on their hydration and radiance while reducing skin quality of life enhancement experiences. roughness.Clinical tests demonstrated an This past year marked our entry into two 80% increase in skin hydration after one 4 NUMBER OF INDEPENDENT ASSOCIATES (in thousands) EARNINGS PER SHARE NET INCOME (in millions) 544 490 $1.19 $1.03 $32 $29 369 264 $0.71 $0.34 $20 $9 2003 2004 2005 2006 2003 2004 2005 2006 2003 2004 2005 2006 use of this seven-product regimen. I believe that we are well-positioned for On the global front,we began shipping continued growth and I am excited about products to Germany from our United our prospects in 2007 as a product leader in Kingdom operation in March 2006,bringing shaping the Wellness Industry.I am the total international markets to nine convinced we have the products,the including Canada.Our international management,and the teamwork to management is focused on drive this growth and the future global opportunities and we believe that we will be well-positioned to enter new markets with the new Global We are better positioned to capture additional market share in the forecasted trillion dollar Wellness industry. systems to support it,as well as the loyal and enthusiastic independent Associates necessary to maintain our leadership in the Wellness industry. Enterprise Resource Planning software system in place.Full installation of the ERP Sincerely, system was completed in April 2007.The new system,GlobalView,will allow us to enter new markets faster and more efficiently and greatly enhance our ability to Samuel L.Caster, manage our business on a global scale. Chairman of the Board and Chief Executive Officer 5 Shaping Opportunity in the Wellness Industry . 6 .. with over half of a million independent Associates w We o ffer over 30 u n i q u e, p ro p r i e t a r y, s cie n ce- bas ed p ro d u c t s. We operate in nine international m ark ets outside of the United States. UNITED KINGDOM UNITED KINGDOM UNITED KINGDOM UNITED KINGDOM UNITED KINGDOM AUSTRALIA • SOUTH KOREA AUSTRALIA • SOUTH KOREA AUSTRALIA • SOUTH KOREA AUSTRALIA • SOUTH KOREA AUSTRALIA • SOUTH KOREA CANADA • USA • TAIWAN CANADA • USA • TAIWAN CANADA • USA • TAIWAN CANADA • USA • TAIWAN CANADA • USA • TAIWAN NEW ZEALAND • DENMARK NEW ZEALAND • DENMARK NEW ZEALAND • DENMARK NEW ZEALAND • DENMARK NEW ZEALAND • DENMARK GERMANY • JAPAN GERMANY • JAPAN GERMANY • JAPAN GERMANY • JAPAN GERMANY • JAPAN Mannatech – Sparking a Revolution 1983 – First biologically active polysaccharide is isolated from aloe and named acemannan. February 1990 – Bio/Technology “Capitalizing on Carbohydrates”Carbohydrates are identified as essential for immune function. 1990 – Journal of Glycobiology established by Oxford University.The 1990s saw the explosion of glycobiology as one of the “hottest”new fields of medical research. November 1993 - Company incorporates in the state of Texas. October 1994 – US Congress passed the Dietary Supplement Health and Education Act of 1994 (DSHEA), which allowed vendors of dietary supplements to educate consumers regarding the effects of certain component ingredients. worldwide. The re is a heightened awareness and con s umer fo cus on optimal NEW ZEALAND • DENMARK health and wellness. UNITED KINGDOM AUSTRALIA • SOUTH KOREA CANADA • USA • TAIWAN GERMANY • JAPAN August 1996 – Reported over 100,000 active independent Associates. October 1995 – Changed our name to Mannatech, Incorporated. August 1996 – Files a patent for composition and use of Ambrotose® complex. 1996 – Harper’s Biochemistry,Vol 24, Murray, et al. Glycoprotein chapter reviews the sugars necessary for cell-to-cell communication. April 1996 – Begins shipping product into Canada. November 1996 – Introduces Ambrotose® complex in the United States. Our Independent Associates are very loyal and are attracted to the unique earning opportunity as we offer one of the direct- selling industry’s highest commission rates of over 40%, as a percentage of net sales. of total At the end of 2006, independent Associates and Members who purchased our Mannatech products numbered 544,000, an 11% increase from 2005, and a 183% increase over the in past 5 years. The growth independent Associates and Members mirrors the increasing health-conscious number consumers natural alternatives to maintain health and wellness. More than half a million and independent Associates Members around the world are attracted to Mannatech based on our unique and proprietary products, a highly competitive the earning opportunity and Company’s to commitment wellness. seeking complex, We have been a global wellness solutions provider since 1993 and our core proprietary ingredient, Ambrotose® was introduced in 1996. Last year, we expanded our wellness portfolio to include two unique new leading- edge are generating excitement and sales the water-based, momentum: products which preservative-free Optimal Skin Care System and PhytoMatrix™, the industry’s first all-natural vitamin and mineral supplement. Both of these products will help open new doors for independent Associates and provide incre- mental income. built Mannatech and its independent Associates have a global business perspective. Many of our most successful independent Associates multi-country have independent businesses. Our Associates Members and demonstrate strong loyalty to the Company and our products. This is evidenced by the high retention rate of continued independent Associates and Members.They also appreciate the proprietary science and uniqueness of our products. With our high quality standards independent Associates and Members trust Mannatech. Further, we provide training in product knowledge, ingredients and nutrition, as well as education in industry rules and regulations. Compliance is part of our culture and we have established policies Taken as a group, our independent Associates are strong proponents of wellness for consumers in the marketplace today. and procedures to train compliance with all applicable laws. The implementation of the new GlobalView Enterprise Resource Planning system will provide greater flexibility, depth of information and timeliness of data to independent Associates which will enhance both their ability to recruit and the ease of transactions with the Company. Our goal is to continue to provide the best services, support, products, training, and opportunity to our current and future independent Associates and Members. (left to right) Natalie L.Logan,Vice President of Global Business Systems, Donald W.Herndon,Vice President of Field Services, Cynthia L.Tysinger,Chief Information Officer and Senior Vice President, Ronald D.Norman,Vice President of International Finance, John W.Price,President of International Operations 7 Shaping the Science of the Wellness Industry . 10 .. with unique,cutting-edge,proprietary products. Scientific validation of the positive impac t of our produc ts remains a top priorit y. We work diligently to meet the highest standard in each mark et in which we operate. April 1998 - First patent for Ambrotose® complex issued in South Africa. October 1998 - Opens operations in Australia. February 1999 - Began trading its common stock on the NASDAQ National Market. 1997 – Reported over $100 million in consolidated net sales. December 1998 – Study by Berger (Metabolism, 1998) showed that galactose and mannose were directly incorporated into human glycoproteins without first being broken down into glucose. Scientists therefore concluded that specific dietary sugars could represent a new class of nutrients. November 1999 - Opens operations in the United Kingdom. This year we celebrated our 10th anniversar y of introducing Ambrotose® complex. June 2000 – Opens operations in Japan. May 2001 – “Impact of Glycobiology on Medicine”, article published in Trends in Immunology outlines that it is becoming increasingly clear how important it is to understand changes in glycosylation patterns. June 2002 - Begins shipping products into New Zealand. July 2002 – Scientific American notes that sugars participant in such biological processes as immunity and cell-to-cell communication. February 2003 – MIT’s Technology Review Glycomics identified as “One of 10 Emerging Technologies That Will Change the World.” PhytoMatrix™ and our Optimal Skin Care System are the most recent examples of Mannatech’s ongoing quest to set the standard in the Wellness Industry. increasing Mannatech has been a pioneer in the field of glyconutrition as it has evolved from a new, relatively unknown nutritional supplement to one with scientific validation as a contributor to maintaining optimal health and wellness.Over a decade ago,Harper’s Biochemistry pointed out that eight sugars are necessary for proper cellular function. Since six of those sugars are often missing from the typical modern diet, Mannatech sought new and better sources of these nutrients. Ambrotose®, In 1996, Mannatech’s efforts culminated with the introduction of Ambrotose® complex, a glyco- nutritional blend technology that has thus far been granted over 20 patents worldwide. Together, Ambrotose®, and Advanced Ambrotose AO® account for over 50% of our total individual finished product sales. When combined with PhytoMatrix™ and Plus, which is included in our Optimal Health System, account for more than 75% of our total individual finished product sales. Over the past decade, Mannatech has conducted numerous types of its glyconutritional research on products. Recently, in conjunction with Hyperion Biotechnology, Mannatech received a first-place award for research indicating that the human digestive tract can break down complex carbo- hydrates Company’s in glyconutritional supplements. the During 2006,Mannatech expanded its wellness product portfolio with two new major proprietary product lines that incorporate revolutionary technology.The Company introduced the Optimal Skin Care System, the industry’s first all-natural water- based, preservative-free skin care line. Recent research has shown that preservatives can have an aging affect on skin cells. all-natural In November, 2006, we also the introduced PhytoMatrix™, nutrition industry’s first supplement containing vitamin complexes combined with 100% plant-sourced minerals. This product the needs of wellness meets consumers all-natural represents a ingredients and competitive advantage the in crowded nutritional supplement market. PhytoMatrix™, and our seeking Today we offer more than two-dozen gylconutritional products for adults and children. Optimal Skin Care System are the most recent examples of Mannatech’s ongoing quest to set the standard in the Wellness Industry. Mannatech has an extensive Quality Assurance program and has been GMP (Good Manufacturing Practices) compliant for human consumption for many years. In addition,we have a full in-house R&D Department, in which we invested over $6.5 million in 2006. Our Product Safety Monitoring program tracks the safe consumption of our products. Whether providing key nutrients to the body from the inside-out, or the outside-in, Mannatech’s products provide leading edge science and technology to meet the growing demand for natural alternatives to help achieve and maintain optimal health and wellness. (left to right) Terry O’Day,Executive Vice President Global Operations, Betsy C.King,Vice President - Quality Assurance, Linda Padilla,Vice President of Global Marketing, Stephen Boyd,MD,PhD,Senior Medical Director, Robert A.Sinnott,MNS,PhD,Senior Vice President and Chief Science Officer 11 Shaping the Future of the Wellness Industry . 14 .. with highly-focused,quality driven,global operatio Our strategic management team is evaluating additional in ter n a tio na l ma r k ets. We intend to broaden o u r va l u e - a d d e d, p ro p r i e t a r y p ro d u c t p o r t fo l i o. September 2003 – Introduces Ambrotose AO®, which combines glyconutrients with a powerful antioxidant. 2004 –Mannatech is the only dietary supplement company invited to present at MIT’s 2nd annual Emerging Technologies Conference. September 2004 – Presents its research at the 7th Annual Jenner conference at Oxford University, which focuses on glybiology and medicine. Mannatech opens operations in the Republic of Korea. June 2005 - Opens operations in Taiwan. August 2005 – Issued its first United States patent for it proprietary compound Ambrotose® complex and Mannatech begins shipping products into Denmark. ons. O u r p ro d u c t ingredients are sourced a l l ove r t h e g l o b e. 2005 – Reported earnings per share over one dollar per diluted share. May 2006 - Introduces Optimal Skin Care products in Japan. March 2006 – Begins shipping products into Germany. November 2006 – Introduces PhytoMatrix™ in the United States and Canada. March 2007 – Introduces Optimal Skin Care System in the United States and has record attendence at Mannafest, its annual global corporate-sponsored event. Many of our most successful independent Associates have built multi-country businesses and implementing GlobalView should streamline our commission payment process and enable us to manage our business even more effectively on a global scale. selling products Being global today means more than in international markets. Although still relatively small with a market capitalization of just over $400 million, Mannatech has established a global presence and the Company is positioning itself as a leading provider of wellness the world. products around Currently, we operate in eight international markets outside of the U.S. and Canada and have management teams on the ground in six of those countries. Our and product proprietary are sourced from all over the globe and our manufacturing crosses borders as well. Most importantly, the installation of our new ERP software system in April 2007, will make Mannatech one of the first companies in the Direct Sales industry, to our knowledge, to have fully-integrated enterprise a planning Project system. GlobalView utilizes Oracle/JDE Enterprise One modules across the organization for General Ledger, Accounts Receivable, Accounts ingredients technology Payable, Inventory Management, Human Resources, Sales Order, and Customer Relationship Manage- ment (call center management,) and is fully-integrated with our Company website and our sales tools offered to our independent Associates. This real-time software system will greatly enhance our current capability and future global expansion as its “state-of-the-art” fully-integrated processing will allow us to enter new markets faster and more efficiently. GlobalView will also streamline our independent Associate commis- sion payment process and enable us to manage our business even more effectively on a global scale. As a direct marketer of nutritional supplements, we are subject to extensive product and sales regulations which differ by country and we work rigorously to meet the highest standard in each market where we have a presence. Germany represents our newest market entry, where we began selling our products in March 2006. We believe that our current product portfolio meets the needs of both We are well positioned to successfully navigate a changing global marketplace. and international domestic consumers and, with the growing popularity of nutritional supple- ments in developed countries, we believe major opportunities lie ahead for sales and profit growth. Our international management team is currently evaluating future market entries in Africa, Asia, and Europe, new as well opportunities in Latin America and our R&D team is dedicated to searching the world for the next generation leading-edge of wellness products. Mannatech is positioned successfully to navigate a changing global marketplace. as (left to right) B.Keith Clark,Senior Vice President,General Counsel & Secretary, Robert D.Panico,Vice President of Global Human Resources, Stephen D.Fenstermacher,Chief Financial Officer and Senior Vice President, Gary M.Spinell,Vice President of Treasury and Investor Relations, Terry L.Persinger,President,Chief Operating Officer,and Board Member 15 MANNATECH,INCORPORATED,CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share information) ASSETS Cash and cash equivalents Short-term investments Restricted cash Accounts receivable, net of allowance of $0.2 million in 2006 Income tax receivable Inventories, net Prepaid expenses and other current assets Deferred tax assets LIABILITIES AND SHAREHOLDERS’ EQUITY Total current assets Long-term investments Property and equipment, net Construction in progress Long-term restricted cash Other assets Long-term deferred tax assets Total assets Current portion of capital leases Accounts payable Accrued expenses Commissions and incentives payable Taxes payable Deferred revenue Total current liabilities Capital leases, excluding current portion Long-term royalties due to an affiliate Long-term deferred tax liabilities Other long-term liabilities Total liabilities 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 outstanding in 2005, and 27,617,081 shares issued and 26,409,987 outstanding in 2006 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Less treasury stock, at cost, 666,149 shares in 2005 and 1,207,094 shares in 2006 Total shareholders’ equity Total liabilities and shareholders’ equity December 31, 2005 2006 $56,207 1,974 2,777 701 — 19,811 3,471 671 85,612 15,375 10,951 8,157 1,476 1,121 103 $122,795 $23 5,476 16,941 15,588 5,773 3,712 47,513 — 3,341 1,086 537 52,477 $45,701 — 2,251 999 2,155 23,923 4,323 1,478 80,830 25,375 16,523 24,725 3,132 1,372 278 $152,235 $92 3,339 26,841 15,511 3,556 2,697 52,036 349 2,879 7,444 730 63,438 — — 3 36,699 42,505 (1,098) 78,109 (7,791) 70,318 $122,795 3 38,941 66,393 (1,749) 103,588 (14,791) 88,797 $152,235 (The contents of this report should be considered in conjunction with the risks and cautionary statements contained in our 2006 annual report filed on Form 10-K, as filed with the United States Securities and Exchange Commission, which includes a complete set of Consolidated Financial Statements and Footnotes.) 18 MANNATECH,INCORPORATED,CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share information) For the year ended December 31, 2006 2005 2004 Net sales Cost of sales Commissions and incentives Gross profit Operating expenses: Selling and administrative expenses Depreciation and amortization Other operating costs Non-cash charge related to an affiliate stock sale Total operating expenses Income from operations Interest income Other income (expense), net Income before income taxes Provisions for income taxes Net income Earnings per common share: Basic Diluted Weighted-average common shares outstanding: Basic Diluted $294,508 $389,383 $410,069 44,847 58,028 58,461 132,231 172,151 182,215 177,078 230,179 240,676 117,430 159,204 169,393 50,006 65,923 3,101 34,739 3,047 3,905 43,766 — 71,892 4,960 48,467 — 90,893 113,594 125,319 26,537 45,610 44,074 735 (274) 1,778 (1,940) 2,513 1,101 26,998 45,448 47,688 (7,446) (16,801) (15,298) $19,552 $28,647 $32,390 $0.74 $0.71 $1.06 $1.03 $1.22 $1.19 26,436 27,491 26,990 27,771 26,598 27,219 (The contents of this report should be considered in conjunction with the risks and cautionary statements contained in our 2006 annual report filed on Form 10-K, as filed with the United States Securities and Exchange Commission, which includes a complete set of Consolidated Financial Statements and Footnotes.) 19 FINANCIAL INFORMATION GEOGRAPHICAL NET SALES IN DOLLARS AND AS A PERCENTAGE OF CONSOLIDATED NET SALES United States Canada Australia United Kingdom Japan New Zealand Republic of Korea* Taiwan** Denmark*** Germany**** Totals 2004 For the year ended December 31, 2005 (in millions) 2006 $192.5 22.2 30.6 10.5 24.5 12.9 1.3 — — — $294.5 65.4% 7.5% 10.4% 3.6% 8.3% 4.4% 0.4% —% —% —% 100% $259.4 28.0 35.7 8.9 35.4 14.6 4.6 2.3 0.5 — $389.4 66.6% 7.2% 9.2% 2.3% 9.1% 3.7% 1.2% 0.6% 0.1% —% 100% $271.4 28.6 30.5 7.5 41.4 8.9 12.4 3.7 3.4 2.3 $410.1 66.2% 7.0% 7.4% 1.8% 10.1% 2.2% 3.0% 0.9% 0.8% 0.6% 100% * Republic of Korea began operations in September 2004. ** Taiwan began operations in June 2005. *** United Kingdom began shipping products to Denmark in August 2005. **** United Kingdom began shipping products to Germany in March 2006. RECAP OF NET SALES Consolidated product sales Consolidated pack sales Consolidated other, including freight Total 2004 2006 For the year ended December 31, 2005 (in millions) $284.8 87 16 $389.4 $309.1 80.7 20.3 $410.1 $209.3 70 14 $294.5 Percentage change 2005 over 2004 2006 over 2005 36.1% 24.5% 14.3% 32.2% 8.5% (8.1%) 20.8% 5.3% CURRENT INDEPENDENT ASSOCIATES AND MEMBERS* New Continuing Total 2004 178,000 191,000 369,000 48.2% 51.8% 100% For the year ended December 31, 2005 230,000 260,000 490,000 47.0% 53.0% 100% 2006 203,000 341,000 544,000 37.4% 62.6% 100% * The number of independent Associates and Members who have purchased our packs or products during the last 12 months. 20 CORPORATE INFORMATION Corporate Headquarters: 600 S. Royal Lane, Suite 200 Coppell, TX. 75019 (972) 471-7400 www.mannatech.com Investor Relations: For investor information, inquiries, reports and filings with the SEC email request to IR@mannatech.com or call (972) 471-6512. Registrar and Transfer Agent: COMPUTERSHARE (877) 498-8861 www.computershare.com Annual Shareholders’ Meeting: Mannatech’s annual shareholder’ meeting will be held at 9:00 a.m. Central Daylight Time on June 14, 2007, for shareholders of record on May 2, 2007. Stock Listing: Mannatech’s stock is listed on the NASDAQ Global Select Market under the symbol “MTEX”. COMMON STOCK PRICE 2005: First Quarter Second Quarter Third Quarter Fourth Quarter 2006: First Quarter Second Quarter Third Quarter Fourth Quarter Low High $17.31 $11.64 $ 9.87 $ 8.17 $11.45 $11.05 $11.76 $13.46 $26.10 $21.10 $19.50 $15.45 $17.38 $20.06 $18.04 $19.26 As of April 9, 2007, there were approximately 5,000 shareholders of record who held approximately 31% of our common stock directly and approximately 160 security brokers and dealers who held approximately 69% of our common stock on behalf of approximately 18,000 shareholders. We declared a total of $0.32 per share in cash dividends during the 2006 year. Special Note Regarding Forward-Looking Statements Statements contained in this report may be 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. Opinions, estimates, targets, expectations, beliefs, forecasts, projections, trends, future plans, guidance, strategies and certain other statements other than statements of historical facts are considered forward-looking statements. When we make forward-looking statements, we are basing them on our management’s beliefs and assumptions, using information currently available to us. Matters discussed in these statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. These risks and uncertainties include descriptions of our objectives, strategies, plans, goals, targets, or other statements and other such risks and uncertainties as identified in the Risk Factors section of our Annual Report on Form 10- K, as well as other SEC filings. We have no intention, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results, or otherwise. 21 BOARD OF DIRECTORS (standing,left to right) (seated,left to right) J.Stanley Fredrick Lead Director, Owner of Fredrick Consulting Services Marlin Ray Robbins Independent Associate, Mannatech, Incorporated Terry L.Persinger President and Chief Operating Officer Samuel L.Caster (Chairman) Chairman of the Board and Chief Executive Officer John Stewart Axford* DSc,MD,FRCP Member of the Faculty at St.George's Hospital and Medical School, University of London Patricia A.Wier* Owner of Patricia Wier, Inc. Gerald E.Gilbert* Of Counsel, Hogan and Hartson, L.L.P. Alan D.Kennedy* Retired, President Worldwide for Tupperware Corporation Larry A.Jobe* President and Founder of P 1 Resources, LLC, and Founder and Chairman of the Board of Legal Network, Ltd. *Independent Director 22 COMMITTEE MEMBERS Audit Committee - Larry A.Jobe (Chairman),Gerald E.Gilbert, Larry A.Jobe (Chairman) Alan D.Kennedy,and Patricia A. Wier Compensation and Stock Option Plan Committee - Alan D.Kennedy (Chairman), Gerald E.Gilbert,Larry A.Jobe, and Patricia A.Wier Alan D.Kennedy (Chairman) John Stewart Axford (Chairman) Science Committee - John Stewart Axford,DSc,MD,FRCP (Chairman), Samuel L.Caster,Gerald E.Gilbert,Alan D.Kennedy, Terry L.Persinger,and Marlin Ray Robbins Governance Committee - Patricia A. Wier (Chairman) Patricia A. Wier (Chairman), Gerald E.Gilbert, Larry A.Jobe,and Alan D.Kennedy Gerald E.Gilbert (Chairman) Compliance Committee - Gerald E.Gilbert (Chairman),John Stewart Axford, Larry A.Jobe,Alan D.Kennedy,and Patricia A.Wier Special Litigation Committee - Gerald E.Gilbert (Chairman),Larry A.Jobe, Alan D.Kennedy,and Patricia A.Wier N N A T EC N N A T EC N N A T EC N N A T EC H H H H A A A A M M M M WE L L N E WE L L N E WE L L N E WE L L N E S S S S S S S S 600 S. Royal Lane, Suite 200 600 S. Royal Lane, Suite 200 Coppell, Texas 75019 (972) 471-7400 Coppell, Texas 75019 (972) 471-7400 www.mannatech.com www.mannatech.com