USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal first quarter ended April 2, 2022.

Key Financial & Operating Highlights

  • First quarter net sales were $273 million as compared with $308 million during the first quarter of the prior year.
  • First quarter diluted EPS totaled $1.15 versus $1.45 during the first quarter of 2021.
  • Company revises fiscal 2022 net sales and diluted EPS outlook to $1.1 billion to $1.2 billion and $5.00 to $5.70, respectively.

Q1 2022 Financial Performance

Consolidated Results

Net Sales

$272.9 million

  • -11% vs. prior-year quarter
  • -10% constant currency vs. prior-year quarter
  • +2% constant currency sequentially
  • -$2.8 million YOY FX impact, or -1%

Diluted EPS

$1.15

  • -21% vs. prior-year quarter
  • +12% sequentially
  • Diluted shares of 19.5 million, -8% year-over-year

Active Customers

552,000

  • -11% vs. prior-year quarter
  • -1% sequentially

“While the first quarter was a respectable start to the year for USANA, net sales were softer than anticipated, particularly around the Lunar New Year holiday in a few key Asia Pacific markets,” said Kevin Guest, Chief Executive Officer and Chairman of the Board. “That said, we made progress in executing our customer experience strategy by rolling out more Active Nutrition products in key markets and by enhancing onboarding programs and training tools.”

Mr. Guest added, “The operating environment in Asia Pacific has become more challenging, particularly in China, where the escalation of COVID-19 has resulted in mass lockdowns, restrictions, and other disruptions. As we look ahead, we are adjusting our strategy to support our teams and Associates in these markets, and we remain optimistic about delivering results in the face of these challenges. We remain focused on executing our strategic initiatives, which we believe will deliver long-term, sustainable growth for all stakeholders.”

Q1 2022 Regional Results:

Asia Pacific Region

Net Sales

$218.4 million

  • -13% vs. prior-year quarter
  • -12% constant currency vs. prior-year quarter
  • +3% constant currency sequentially
  • 80% of consolidated net sales

Active Customers

422,000

  • -11% vs. prior-year quarter
  • -1% sequentially

Asia Pacific Sub-Regions

Greater China

Net Sales

$133.7 million

  • -10% vs. prior-year quarter
  • Constant currency net sales: -12%

Active Customers

255,000

  • -8% vs. prior-year quarter
  • Flat sequentially

North Asia

Net Sales

$29.9 million

  • -1% vs. prior-year quarter
  • Constant currency net sales: +7%

Active Customers

57,000

  • -3% vs. prior-year quarter
  • -2% sequentially

Southeast Asia Pacific

Net Sales

$54.7 million

  • -24% vs. prior-year quarter
  • Constant currency net sales: -21%

Active Customers

110,000

  • -20% vs. prior-year quarter
  • -4% sequentially
Americas and Europe Region

Net Sales

$54.4 million

  • -4% vs. prior-year quarter
  • -3% constant currency vs. prior-year quarter
  • -1% constant currency sequentially
  • 20% of consolidated net sales

Active Customers

130,000

  • -10% vs. prior-year quarter
  • -2 % sequentially

Balance Sheet and Share Repurchase Activity

The Company ended the quarter with $238 million in cash and cash equivalents after repurchasing 288,000 shares during the quarter, for a total of $25 million. Diluted shares outstanding totaled 19.5 million during the first quarter of 2022. As of April 2, 2022, the Company had approximately $83 million remaining under the share repurchase authorization.

Fiscal 2022 Outlook

The Company is revising its net sales and earnings per share outlook for fiscal year 2022 as follows:

Fiscal Year 2022 Outlook

 

 

Revised Range

 

Previous Range

Consolidated Net Sales

$1.100 - $1.200 billion

$1.125 - $1.225 billion

Diluted EPS

$5.00 - $5.70

$5.25 - $6.00

Doug Hekking, Chief Financial Officer, said, “Despite some sales softness across a few key markets and ongoing inflationary pressures, our first quarter operating results were within the range reflected in our internal forecast. We are, however, reducing our net sales and diluted EPS outlook for fiscal 2022 due to the elevated uncertainty surrounding the COVID-19 environment in China.”

Management Commentary Document and Conference Call

For more information on the USANA’s operating results, please see the Management Commentary document, which has been posted on the Company’s website (http://ir.usana.com) under the Investor Relations section. USANA’s management team will hold a conference call and webcast to discuss today’s announcement with investors on Wednesday, April 27, 2022 at 11:00 AM Eastern Time. Investors may listen to the call by accessing USANA’s website at http://ir.usana.com. The call will consist of brief opening remarks by the Company’s management team, followed by a questions and answers session.

Non-GAAP Financial Measures

The Company prepares its financial statements using U.S. generally accepted accounting principles (“GAAP”). Constant currency net sales, earnings, EPS and other currency-related financial information (collectively, “Financial Results”) are non-GAAP financial measures that remove the impact of fluctuations in foreign-currency exchange rates (“FX”) and help facilitate period-to-period comparisons of the Company’s Financial Results that we believe provide investors an additional perspective on trends and underlying business results. Constant currency Financial Results are calculated by translating the current period's Financial Results at the same average exchange rates in effect during the applicable prior-year period and then comparing this amount to the prior-year period's Financial Results.

About USANA

USANA develops and manufactures high-quality nutritional supplements, functional foods and personal care products that are sold directly to Associates and Preferred Customers throughout the United States, Canada, Australia, New Zealand, Hong Kong, China, Japan, Taiwan, South Korea, Singapore, Mexico, Malaysia, the Philippines, the Netherlands, the United Kingdom, Thailand, France, Belgium, Colombia, Indonesia, Germany, Spain, Romania, and Italy. More information on USANA can be found at www.usana.com.

Safe Harbor

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Our actual results could differ materially from those projected in these forward-looking statements, which involve a number of risks and uncertainties, including: uncertainty related to the magnitude, scope and duration of the impact of the COVID-19 pandemic (“COVID-19”) to our business, operations and financial results; the further spread of, and regulatory measures or voluntary actions that may be put in place to limit the spread of, COVID-19 in the markets where we operate, including restrictions on business operations, shelter at home, or social distancing requirements; the potential for a resurgence of COVID-19 spread in any of our markets in the future; the impact of COVID-19 on the domestic and world economies, including any negative impact on discretionary spending, consumer demand, and consumer behavior in general; regulatory risk in China in connection with the health products and direct selling business models; regulatory risk in the United States in connection with the direct selling business model; potential negative effects of deteriorating foreign and/or trade relations between the United States and China; potential negative effects from geopolitical relations and conflicts, including the Russia-Ukraine conflict; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material failures of our information technology systems; global economic conditions generally; reliance upon our network of independent Associates; risk associated with governmental regulation of our products, manufacturing and direct selling business model; adverse publicity risks globally; risks associated with our international expansion and operations; and uncertainty relating to the fluctuation in U.S. and other international currencies. The contents of this release should be considered in conjunction with the risk factors, warnings, and cautionary statements that are contained in our most recent filings with the Securities and Exchange Commission. The forward-looking statements in this press release set forth our beliefs as of the date hereof. We do not undertake any obligation to update any forward-looking statement after the date hereof or to conform such statements to actual results or changes in the Company’s expectations, except as required by law.

USANA Health Sciences, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

Quarter Ended

2-Apr-22

 

3-Apr-21

  Net sales

$

272,867

$

307,976

Cost of sales

 

51,383

 

57,651

Gross profit

 

221,484

 

250,325

Operating expenses: Associate incentives

 

119,620

 

134,495

Selling, general and administrative

 

68,797

 

71,633

Earnings from operations

 

33,067

 

44,197

Other income (expense), net

 

220

 

139

Earnings before income taxes

 

33,287

 

44,336

Income taxes

 

10,818

 

13,715

NET EARNINGS

$

22,469

$

30,621

    Earnings per share - diluted

$

1.15

$

1.45

Weighted average shares outstanding - diluted

 

19,481

 

21,096

USANA Health Sciences, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

  As of As of 2-Apr-22 1-Jan-22 ASSETS Current Assets Cash and cash equivalents

$

237,753

$

239,832

Inventories

 

97,581

 

98,318

Prepaid expenses and other current assets

 

28,451

 

26,967

Total current assets

 

363,785

 

365,117

  Property and equipment, net

 

100,792

 

101,780

Goodwill

 

17,661

 

17,668

Intangible assets, net

 

30,124

 

30,442

Deferred tax assets

 

4,542

 

4,839

Other assets

 

56,015

 

57,894

Total assets

$

572,919

$

577,740

  LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable

$

11,248

$

13,508

Line of credit - short term

 

10,000

 

-

Other current liabilities

 

136,719

 

147,282

Total current liabilities

 

157,967

 

160,790

  Deferred tax liabilities

 

11,419

 

7,497

Other long-term liabilities

 

13,587

 

14,329

  Stockholders' equity

 

389,946

 

395,124

Total liabilities and stockholders' equity

$

572,919

$

577,740

USANA Health Sciences, Inc.

Sales by Region

(unaudited)

(in thousands)

  Quarter Ended April 2, 2022 April 3, 2021 Change from prior year Currencyimpact onsales % changeexcludingcurrencyimpact Asia Pacific Greater China

$

133,739

49.0

%

$

148,978

48.4

%

$

(15,239

)

(10.2

%)

$

2,530

 

(11.9

%)

Southeast Asia Pacific

 

54,742

20.0

%

 

72,148

23.4

%

 

(17,406

)

(24.1

%)

 

(2,596

)

(20.5

%)

North Asia

 

29,939

11.0

%

 

30,165

9.8

%

 

(226

)

(0.7

%)

 

(2,446

)

7.4

%

Asia Pacific Total

 

218,420

80.0

%

 

251,291

81.6

%

 

(32,871

)

(13.1

%)

 

(2,512

)

(12.1

%)

  Americas and Europe

 

54,447

20.0

%

 

56,685

18.4

%

 

(2,238

)

(3.9

%)

 

(293

)

(3.4

%)

$

272,867

100.0

%

$

307,976

100.0

%

$

(35,109

)

(11.4

%)

$

(2,805

)

(10.5

%)

Active Associates by Region(1)

(unaudited)

  As of April 2, 2022 April 3, 2021 Asia Pacific Greater China

79,000

32.3

%

88,000

30.4

%

Southeast Asia Pacific

76,000

31.0

%

99,000

34.1

%

North Asia

36,000

14.7

%

38,000

13.1

%

Asia Pacific Total

191,000

78.0

%

225,000

77.6

%

  Americas and Europe

54,000

22.0

%

65,000

22.4

%

245,000

100.0

%

290,000

100.0

%

   

Active Preferred Customers by Region (2)

(unaudited)

  As of April 2, 2022 April 3, 2021 Asia Pacific Greater China

176,000

57.3

%

188,000

57.5

%

Southeast Asia Pacific

34,000

11.1

%

38,000

11.6

%

North Asia

21,000

6.8

%

21,000

6.4

%

Asia Pacific Total

231,000

75.2

%

247,000

75.5

%

  Americas and Europe

76,000

24.8

%

80,000

24.5

%

307,000

100.0

%

327,000

100.0

%

(1) Associates are independent distributors of our products who also purchase our products for their personal use. We only count as active those Associates who have purchased from us any time during the most recent three-month period, either for personal use or resale.

(2) Preferred Customers purchase our products strictly for their personal use and are not permitted to resell or to distribute the products. We only count as active those Preferred Customers who have purchased from us any time during the most recent three-month period. China utilizes a Preferred Customer program that has been implemented specifically for that market.

 

Investor contact: Patrique Richards Investor Relations (801) 954-7961 investor.relations@usanainc.com

Media contact: Dan Macuga Public Relations (801) 954-7280

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