USANA Health Sciences, Inc. (NYSE: USNA) today announced
financial results for its fiscal first quarter ended April 1,
2023.
Key Financial & Operating Results
- First quarter net sales were $248 million versus $228 million
for the fourth quarter of 2022 and $273 million during the first
quarter of 2022.
- First quarter diluted EPS was $0.95 as compared with $0.66 for
the fourth quarter of 2022 and $1.15 during the first quarter of
2022.
- Generated $13 million of operating cash flow during the
quarter.
- Fiscal 2023 net sales and diluted EPS guidance updated to $875
to $950 million and $2.40 to $3.30, respectively, from $850 million
to $950 million and $2.35 to $3.30.
Q1 2023 Financial Performance
Consolidated Results
Net Sales
$248 million
- +9% sequentially
- +5% sequentially in constant currency
- -9% vs. Q1 2022
- -4% constant currency vs. Q1 2022
- -$13 million YOY FX impact, or -5%
Diluted EPS
$0.95
- +44% sequentially
- -17% vs. Q1 2022
- Diluted shares of 19.3 million, -1% YOY
Active Customers
491,000
- Flat sequentially
- -11% vs. Q1 2022
“USANA’s solid first quarter performance was driven by several
initiatives that helped stabilize active customer counts and
contribute to sequential quarter net sales growth,” said Kevin
Guest, Chief Executive Officer and Chairman of the Board. “Our
results during the first few weeks of the quarter benefitted from
increased demand for several of our health products in China
following the government’s shift in COVID policy. In addition, our
announcement of product price increases in several markets
stimulated product purchasing ahead of those increases. Because of
the solid start to the year, we have raised the lower end of our
net sales and earnings per share guidance.
“We continue to make progress on several key strategic
initiatives for 2023, most of which are aimed at increasing the
active customer base and positioning USANA for long-term
sustainable growth. Key among these initiatives is the return to
live sales meetings and events where possible. The in-person
meetings and events held during and following the first quarter
were targeted at engaging and further incenting our sales force and
the feedback from these events has been encouraging. We remain
optimistic that our overall strategy for the year will support
customer engagement and stimulate positive momentum in our
business.”
Q1 2023 Regional Results:
Asia Pacific Region
Net Sales
$200 million
- +9% sequentially
- +4% constant currency sequentially
- -9% vs. Q1 2022
- -3% constant currency vs. Q1 2022
- 80% of consolidated net sales
Active Customers
386,000
- +1% sequentially
- -9% vs. Q1 2022
Asia Pacific
Sub-Regions
Greater China
Net Sales
$124 million
- +5% sequentially
- +1% constant currency sequentially
- -7% vs. Q1 2022
- -1% constant currency vs. Q1 2022
Active Customers
242,000
- -1% sequentially
- -5% vs. Q1 2022
North Asia
Net Sales
$30 million
- +21% sequentially
- +12% constant currency sequentially
- -1% vs. Q1 2022
- +5% constant currency vs. Q1 2022
Active Customers
54,000
- +2% sequentially
- -5% vs. Q1 2022
Southeast Asia Pacific
Net Sales
$46 million
- +14% sequentially
- +10% constant currency sequentially
- -15% vs. Q1 2022
- -12% constant currency vs. Q1 2022
Active Customers
90,000
- +3% sequentially
- -18% vs. Q1 2022
Americas and Europe
Region
Net Sales
$49 million
- +9% sequentially
- +8% constant currency sequentially
- -11% vs. Q1 2022
- -9% constant currency vs. Q1 2022
- 20% of consolidated net sales
Active Customers
105,000
- -1% sequentially
- -19% vs. Q1 2022
“Our first quarter operating results were modestly ahead of
expectations and were predominantly driven by increased customer
activity in our Asia Pacific region. The operating leverage
generated by the growth in revenue positively contributed to our
first quarter operating performance,” said Doug Hekking, Chief
Financial Officer.
Fiscal Year 2023 Outlook
The Company is raising the lower end of its net sales and
earnings per share outlook for fiscal year 2023 as follows:
Fiscal Year 2023
Outlook
Revised Range
Previous Range
Consolidated Net Sales
$875 - $950 million
$850 - $950 million
Diluted EPS
$2.40 - $3.30
$2.35 - $3.30
Mr. Hekking added, “We are raising the lower end of our guidance
range for both net sales and earnings per share as a result of the
performance in the first quarter. Sales during the first few weeks
of the quarter benefited by approximately $12 million due to higher
demand for several of our health products in China as well as an
estimated $13 million in customer purchasing activity ahead of
announced price increases. Furthermore, our fiscal 2023 outlook
continues to reflect a wider range due to the continued uncertainty
surrounding the operating and geopolitical environment around the
world.”
Balance Sheet and Share Repurchase Activity
The Company generated $13 million of operating cash flow during
the first quarter and ended the quarter with $295 million in cash
and cash equivalents and remained debt-free. The Company did not
repurchase shares during the quarter and, as of April 1, 2023, had
approximately $83 million remaining under the current share
repurchase authorization.
Management Commentary Document and Conference Call
For further 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 26, 2023 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 COVID-19 pandemic
(“COVID-19”) to our business, operations and financial results; 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; compliance with data privacy and security laws
and regulations in our markets around the world; 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, including
increasing inflationary pressure around the world and any negative
impact on our operating costs, consumer demand and consumer
behavior in general; 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 1-Apr-23 2-Apr-22
Net sales
$
248,360
$
272,867
Cost of sales
48,519
51,383
Gross profit
199,841
221,484
Operating expenses: Associate incentives
106,070
119,620
Selling, general and administrative
66,926
68,797
Earnings from operations
26,845
33,067
Other income (expense), net
1,656
220
Earnings before income taxes
28,501
33,287
Income taxes
10,118
10,818
NET EARNINGS
$
18,383
$
22,469
Earnings per share - diluted
$
0.95
$
1.15
Weighted average shares outstanding - diluted
19,328
19,481
USANA Health Sciences, Inc. Consolidated Balance
Sheets (In thousands) (Unaudited)
As of As
of 1-Apr-23 31-Dec-22 ASSETS Current
Assets Cash and cash equivalents
$
295,454
$
288,420
Inventories
64,490
67,089
Prepaid expenses and other current assets
35,934
28,873
Total current assets
395,878
384,382
Property and equipment, net
96,798
97,773
Goodwill
17,411
17,368
Intangible assets, net
31,971
32,432
Deferred tax assets
7,868
9,799
Other assets
55,607
54,795
Total assets
$
605,533
$
596,549
LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities Accounts payable
$
10,511
$
11,049
Other current liabilities
119,711
132,784
Total current liabilities
130,222
143,833
Deferred tax liabilities
5,575
4,071
Other long-term liabilities
14,382
14,173
Stockholders' equity
455,354
434,472
Total liabilities and stockholders' equity
$
605,533
$
596,549
USANA Health Sciences, Inc. Sales by Region (In
thousands) (Unaudited)
Quarter Ended April 1,
2023 April 2, 2022 Change from prior year
Currencyimpact onsales %changeexcludingcurrencyimpact
Asia Pacific Greater China
$
123,820
49.9%
$
133,739
49.0%
$
(9,919)
(7.4%)
$
(8,821)
(0.8%)
Southeast Asia Pacific
46,286
18.6%
54,742
20.0%
(8,456)
(15.4%)
(2,125)
(11.6%)
North Asia
29,608
11.9%
29,939
11.0%
(331)
(1.1%)
(1,690)
4.5%
Asia Pacific Total
199,714
80.4%
218,420
80.0%
(18,706)
(8.6%)
(12,636)
(2.8%)
Americas and Europe
48,646
19.6%
54,447
20.0%
(5,801)
(10.7%)
(635)
(9.5%)
$
248,360
100.0%
$
272,867
100.0%
$
(24,507)
(9.0%)
$
(13,271)
(4.1%)
Active Associates by Region(1) (Unaudited)
As
of April 1, 2023 April 2, 2022 Asia Pacific
Greater China
74,000
34.1%
79,000
32.3%
Southeast Asia Pacific
61,000
28.1%
76,000
31.0%
North Asia
35,000
16.1%
36,000
14.7%
Asia Pacific Total
170,000
78.3%
191,000
78.0%
Americas and Europe
47,000
21.7%
54,000
22.0%
217,000
100.0%
245,000
100.0%
Active Preferred Customers by Region (2)
(Unaudited)
As of April 1, 2023 April 2,
2022 Asia Pacific Greater China
168,000
61.3%
176,000
57.3%
Southeast Asia Pacific
29,000
10.6%
34,000
11.1%
North Asia
19,000
6.9%
21,000
6.8%
Asia Pacific Total
216,000
78.8%
231,000
75.2%
Americas and Europe
58,000
21.2%
76,000
24.8%
274,000
100.0%
307,000
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/20230425005960/en/
Investor contact: Andrew Masuda Investor Relations (801)
954-7201 investor.relations@usanainc.com
Media contact: Dan Macuga Public Relations (801) 954-7280
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