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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220426006114/en/
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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