Welcome to the Mannatech Incorporated second quarter 2008 earnings conference call. (Operator Instructions) It is now my pleasure to introduce your host for today’s call, the new President and CEO, Wayne Badovinus. Now I would like to introduce our moderator for the call today Gary Spinell, Vice President of Finance and Corporate Communication.

Welcome to Mannatech’s second quarter 2008 earnings call. Before we begin the call I will first read the Safe Harbor statement. 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”, “expects”, “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 have the distinct honor to introduce Mannatech’s new president and CEO Mr. Wayne Badovinus.

It is an honor to be here and speak with you today. Since this is my first earnings call with Mannatech, I want to briefly introduce myself. I come with 43 years experience in major companies, exhibiting special brand identities, such as Nordstrom, Teddy Bower and William Sonoma. In each of these companies the spotlight was on excellent customer service, high quality products and profitability. Mannatech is no different than those companies that were founded on their high quality attributes, yet today Mannatech is somewhat different due to its major challenges. I will discuss these challenges in a few minutes. As we reported, second quarter 2008 sales and earnings continued their declining trend. Sales were $86.8 million, a decrease of 22.3% versus second quarter 2007. This compares to last year’s sales of $111.7 million. Most of the sales shortfall came from our North American markets which showed a decrease of 31.8% versus the prior year. Three factors contributed to these sales under performance in the domestic markets. The Texas Attorney General’s Litigation, a new focus on the wellness industry impacted all associates and members and a slowing US economy. International sales were slightly below prior year down 2.2%. This was also primarily due to the slowing economy worldwide. We recorded a net loss in the second quarter of $10.5 million or $0.40 per diluted share. This compares to net income of $1.5 million or $0.06 earnings per diluted share for the second quarter 2007. Net income was impacted by a number of accruals for litigation and severance expenses. We recorded a pre-tax loss of $16.9 million in the quarter compared to pre-tax income of $2.6 million for last year’s second quarter. Steve Fenstermacher our CFO will discuss the details of our financial performance in a few moments. Total independent associates…

The second quarter results for both sales and operating earnings were again below last year. Federal significant reserves were included in the quarter reflecting litigation and recent personnel reduction. Our deficit of $0.40 per share in the second quarter compared unfavorably with the second quarter of 2007 that showed earnings of $0.06 per share. The second quarter 2008 deficit reflected the decreased level of domestic sales and recruiting which was experienced over the last three months. Although we experienced an operating deficit in the quarter our financial conditions continued to include a high level of liquidity. Our balance sheet continued to show eventually no long-term debt and for June 30, we held over $50 million in total cash. The continuing slow sales pattern in North America did not have a specific impact on our product cost numbers. Our cost of goods sold rate increased to 15% for the quarter, higher than the 2007 prior year three-month period by seven tenths of one point. Our product cost rates in the middle two quarters last year were somewhat elevated due to customer satisfaction related product give away and reserves caused by problems encountered with certain new skin care items. Weight in the second quarter this year was distorted by inventory reserves taken in several of our international countries related to some market specific product formulations made for those markets only. In addition reserves were taken for some promotional materials which are in the process of being replaced. Commission and incentives expense was 47.7% in the quarter an increase by nine tenths of one point compared to the 2007 second quarter. Accrued travel incentive costs were essentially even with last year in rate-to-sales while paid commissions were responsible for the overall rate increase. Direct paid commissions rose in rate-to-sales reaching 45.3% which was…

We’ve already taken the initial steps to reverse the profit decline and to renew the enthusiasm and energy of our valued associates. Our board, management team, employees and valued sales associates are committed to working together with renewed commitment to the Mannatech mission. My personal mantra is institutional excellence and a positive personal mind set. I expect excellence from myself and no less from those around me. In addition it is important to understand my and our team’s belief and the power of thinking positively. To be a larger, successful company with strong brand identity requires we think and act like one now. Our positive and planned actions of today create successful results tomorrow. I decided to join Mannatech because of the high quality, proprietary products that enrich the quality of life. To be a part of a company that can make a difference in a customer’s life is a special joy. Unquestionably there are business and financial challenges, but I have been here before. I have a proven track record in driving profitability and sales to new levels, while at the same time strengthening the company’s brand identity. I believe Mannatech has the right products for the emerging wellness market and we have those products at the right time. Further I believe Mannatech will continue to meet market demands for high quality, innovative products. I further believe Mannatech has a great future in the dynamic wellness market. We are committed to the bright, new future; we are not looking back, so from here we are moving forward completely focused on one goal, becoming the leader in the wellness industry we will create a new Mannatech and now we will take your questions.

(Operator Instructions) Your first question comes from Peter Park - Park West Asset Management.

Can you give us a sense of how much the restructuring and litigation reserves were?

Without going into a great deal of detail, you can see from the changes in our cost structure from year-to-year, that some fairly large reserves and charges were taken during the quarter. I don’t want to get into specific areas making up the charges, but as you heard during the call we went through a very difficult reduction in force here in the office. The company did go to great lengths to make sure that the individual impacted in that reduction were provided with severance and outplacement services, so obviously this is a considerable portion of the reduction. As well, we have experienced a number of charges in the legal area and our overall professional cost area was up significantly versus last year and we do have several pieces of litigation through which we are continuing to navigate and that’s a percent of the major areas of the overall change.

So when we think about what margins we might have in the third quarter and how much of the operating losses this quarter came from, those two items, can you give us a sense of how to think about the third quarter?

In relative terms, yes; these charges and reserves taken in the second quarter were largely responsible, obviously for the large pre-tax deficit which we experienced in the quarter. As we mentioned during the body of the call, we believe that in many ways many of our cost challenges will now be behind us and we do look forward over the next several quarters returning to somewhat more of a normal cost structure.

The $24 million in the other operating costs, is that where these two items are?

The professional charges, legal accounting and consulting are in that particular category.

The restructuring charge for the employee reduction, that shows up in selling and administrative?

Yes that’s correct.

The linearity of sales during the second quarter, obviously the sales are down quite a bit. Can you give us a sense of how April, May and June went and perhaps July as well?

I can’t really get into any specifics concerning the July numbers. What we have seen is that as you look through the split between our domestic sales pattern and the international pattern, while we do have some growth going on in certain areas of international markets, there are also several countries with some challenges. So we have not seen a great deal of variability during the second quarter, we can’t go that far and specifically in looking at the numbers of recruits which have declined, there has been a lower level of recruiting edition as you can see within that particular table.

But what I meant was how was April compared to the year ago April, how is May? Did things get worse as the quarter progressed or did things improve as the quarter progressed?

Things have been in general fairly flat now for several quarters. There’s not a great deal of variability. Without getting into weekly details, etc, what you see in terms of charting the domestic side if you’ve gone back through the past several quarters we are seeing essentially a flat line.

I don’t understand when you say flat line because sales were down 22% during the quarter. What do you mean?

I’m talking about specific trend line, not a specific percentage change against the prior year. Once again, although we mentioned it during the call, the second quarter a year ago had volume of $111.7 million and that was an all time record quarter for the company. Obviously we are at a different level of businesses at this point, so I’m talking more about how the domestic business has gone quarter to quarter to quarter, rather than specifically looking at the quarter a year ago okay.

Your next question comes from Thomas Quinn - Mannatech.

Yes, I was wondering if a dividend will be declared for the quarter.

The dividend is an issue which is considered by our board of directors each quarter. A number of factors are examined every quarter as they meet and the board is scheduled for a meeting in the latter part of August.

Recently you announced dividend twice prior to earlier period, but I though maybe this time you would have made a decision.

Well the Board meets at various times through the year, generally on a quarterly basis and the question of dividend is considered at each meeting, but not in between.

Your next question comes from [Leepen Tricot] - private investor. [Leepen Tricot] – Private Investor: I had a question as to why does Mannatech allow all these websites that are to slander the company and it’s products. Why don’t you make it easier for its associates to get the in-story out there about Mannatech?

We are working on ways to allow associates to tell the Mannatech’s story to sell products on a website, but it is not our intent to have our associates take on things that are in or on the web or for us to try to get into web based arguments about our business. We are looking forward, we are counting on our associates to look forward, we’ve got great proprietary products that benefit customers and we’re going to focus on doing the job that we know we could do to compete in the market place. We will not be diverted by people from the bleachers chipping away at the reality of that future. [Leepen Tricot] – Private Investor: I know that it’s got to be arranged in the company for all those people out there making all those statements about our products.

The answer to those people out there is to get out and sell the product and run the business.

We have no further questions in queue at this time.

Thank you all very much. At this time we’ll close the call.