USANA Health Sciences, Inc. (NYSE: USNA) today announced
financial results for its fiscal fourth quarter and fiscal year
ended December 30, 2023.
Key Financial Results & Guidance
- Fourth quarter net sales were $221 million versus $228 million
during Q4 2022 and $213 million during Q3 2023.
- Fourth quarter diluted EPS was $0.87 as compared with $0.66
during Q4 2022.
- Fiscal year 2023 net sales were $921 million as compared with
$999 million during fiscal year 2022.
- Fiscal year 2023 diluted EPS totaled $3.30 versus $3.59 during
fiscal year 2022.
- Company provides initial fiscal year 2024 net sales and diluted
EPS guidance of $850 million to $920 million and $2.40 to $3.00,
respectively.
Q4 2023 Financial
Performance
Consolidated Results
Net Sales
$221 million
- -3% vs. Q4 2022
- No meaningful FX impact
- +4% sequentially
Diluted EPS
$0.87
- +32% vs. Q4 2022
- +47% sequentially
Active Customers
483,000
- -1% vs. Q4 2022
- +4% sequentially
“USANA delivered solid fourth quarter operating results, which
exceeded our expectations,” said Jim Brown, President and Chief
Executive Officer. “Our sales strengthened, in part, in response to
a global incentive offering that was particularly effective in our
Greater China region where it helped generate double-digit
sequential growth in Active Customer counts. This boost helped to
offset the seasonal slowdown we typically experience during the
final month of the quarter and helped us finish the year
strong.”
Fiscal Year 2023 Financial
Performance
Consolidated Results
Net Sales
$921 million
- -8% vs. prior year
- -5% constant currency vs. prior year
- -$28 million YOY FX impact, or -3%
Diluted EPS
$3.30
Mr. Brown continued, “Both net sales and diluted EPS for fiscal
2023 exceeded our guidance ranges. Although 2023 was a challenging
year, we made meaningful progress on several strategic initiatives
that will support future growth in customers and net sales. For
instance, we commenced operations in India, USANA’s 25th global
market, near the end of the fourth quarter and this market opening
is a significant milestone for our company. Although we are just
getting started in India and expect a slow, steady and sustained
growth trajectory, we are very optimistic about the long-term
growth opportunity this important market provides.”
Q4 2023 Regional Results:
Asia Pacific Region
Net Sales
$177 million
- -3% vs. Q4 2022
- No meaningful FX impact
- +4% sequentially
- 80% of consolidated net sales
Active Customers
383,000
- Flat vs. Q4 2022
- +6% sequentially
Asia Pacific
Sub-Regions
Greater China
Net Sales
$116 million
- -2% vs. Q4 2022
- -1% constant currency vs. Q4 2022
- +9% sequentially
Active Customers
255,000
- +5% vs. Q4 2022
- +11% sequentially
North Asia
Net Sales
$22 million
- -10% vs. Q4 2022
- -12% constant currency vs. Q4 2022
- -9% sequentially
Active Customers
48,000
- -9% vs. Q4 2022
- -2% sequentially
Southeast Asia Pacific
Net Sales
$39 million
- -4% vs. Q4 2022
- -3% constant currency vs. Q4 2022
- Flat sequentially
Active Customers
80,000
- -8% vs. Q4 2022
- -4% sequentially
Americas and Europe
Region
Net Sales
$44 million
- -1% vs. Q4 2022
- -3% constant currency vs. Q4 2022
- +1% sequentially
- 20% of consolidated net sales
Active Customers
100,000
- -6% vs. Q4 2022
- -2% sequentially
Balance Sheet and Share Repurchase Activity
The Company generated $26 million in operating cash flow during
the fourth quarter and ended the year with $330 million in cash and
cash equivalents. The Company did not repurchase any shares during
the quarter. As of December 30, 2023, the Company had approximately
$71 million remaining under the current share repurchase
authorization.
Fiscal Year 2024 Outlook
Mr. Brown continued, “Growth in Active Customers across all
regions remains our top priority, and to this end we will continue
to execute several key initiatives including: 1) Increased
engagement with Associate leaders to further support expansion of
their businesses; 2) Enhanced, market-specific incentive offerings
that reward growth; 3) Expansion of our presence in India; 4)
Product innovation and development and; 5) Pursuit of additional
acquisition opportunities.
The Company is introducing net sales and earnings per share
outlook for fiscal year 2024, as detailed in the table below:
Fiscal Year 2024
Outlook
Range
Consolidated Net Sales
$850 - $920 million
Diluted EPS
$2.40 - $3.00
“We are pleased with our fourth quarter results, which
contributed to our strong finish to the year,” said Doug Hekking,
Chief Financial Officer. “That said, we encountered challenging
economic conditions in many of our markets during 2023, and we
anticipate that 2024 will continue to be challenging.”
Mr. Hekking added, “Our initial outlook for fiscal 2024 reflects
year-over-year net sales performance between flat and down 7% on a
constant currency basis. In making this YOY comparison, it is
important to note that 2023 benefited from approximately $25
million of incremental net sales in the first quarter, which is not
expected to re-occur in the current year. We also anticipate that
unfavorable currency exchange rates will have a modest negative
impact on net sales in fiscal 2024.
“Our 2024 fiscal outlook assumes an operating margin of 8% to
9%, which reflects increased investments in India and our
previously acquired businesses. We project an effective tax rate
between 38% and 40% for the year and a diluted share count of
approximately 19.3 million.”
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, February 7, 2024 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, Italy, and
India. 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: global economic conditions generally, including
continued inflationary pressure around the world and 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 in the
United States, China and other key markets; potential negative
effects of deteriorating foreign and/or trade relations between or
among the United States, China and other key markets; potential
negative effects from geopolitical relations and conflicts around
the world, including the Russia-Ukraine conflict and the conflict
in Israel; compliance with data privacy and security laws and
regulations in our markets around the world; 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; adverse publicity risks
globally; risks associated with commencing operations in India and
future international expansion and operations; uncertainty relating
to the fluctuation in U.S. and other international currencies; and
the potential for a resurgence of COVID-19, or another pandemic, in
any of our markets in the future and any related impact on consumer
health, domestic and world economies, including any negative impact
on discretionary spending, consumer demand, and consumer behavior
in general. 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 Twelve Months Ended
30-Dec-23 31-Dec-22 30-Dec-23 31-Dec-22
Net sales
$
221,083
$
227,960
$
921,010
$
998,601
Cost of sales
42,319
46,430
176,693
193,890
Gross profit
178,764
181,530
744,317
804,711
Operating expenses: Associate incentives
95,881
97,879
394,257
434,793
Selling, general and administrative
58,664
61,100
256,989
262,304
Earnings from operations
24,219
22,551
93,071
107,614
Other income, net
2,392
251
9,382
1,007
Earnings before income taxes
26,611
22,802
102,453
108,621
Income taxes
9,845
10,007
38,665
39,271
NET EARNINGS
$
16,766
$
12,795
$
63,788
$
69,350
Earnings per share - diluted
$
0.87
$
0.66
$
3.30
$
3.59
Weighted average shares outstanding - diluted
19,253
19,263
19,345
19,310
USANA Health Sciences, Inc. Consolidated Balance
Sheets (In thousands) (Unaudited)
As of As
of 30-Dec-23 31-Dec-22 ASSETS Current
Assets Cash and cash equivalents
$
330,420
$
288,420
Inventories
61,454
67,089
Prepaid expenses and other current assets
25,872
28,873
Total current assets
417,746
384,382
Property and equipment, net
99,814
97,773
Goodwill
17,102
17,368
Intangible assets, net
29,919
32,432
Deferred tax assets
13,284
9,799
Other assets*
54,892
54,795
Total assets
$
632,757
$
596,549
LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities Accounts payable
$
10,070
$
11,049
Line of credit - short term
786
-
Other current liabilities
107,989
132,784
Total current liabilities
118,845
143,833
Deferred tax liabilities
4,552
4,071
Other long-term liabilities
12,158
14,173
Stockholders' equity
497,202
434,472
Total liabilities and stockholders' equity
$
632,757
$
596,549
*Includes noncurrent inventories of $3,128 and $3,479 as of
30-Dec-23 and 31-Dec-22, respectively. Total inventories were
$64,582 and $70,568 as of 30-Dec-23 and 31-Dec-22, respectively.
USANA Health Sciences, Inc. Sales by Region (In
thousands) (Unaudited)
Quarter Ended December
30,2023 December 31,2022
Change from prior year
Currencyimpact onsales %
changeexcludingcurrencyimpact Asia Pacific Greater China
$
115,921
52.4
%
$
118,290
51.9
%
$
(2,369
)
(2.0
%)
$
(1,352
)
(0.9
%)
Southeast Asia Pacific
39,116
17.7
%
40,598
17.8
%
(1,482
)
(3.7
%)
(146
)
(3.3
%)
North Asia
22,065
10.0
%
24,543
10.8
%
(2,478
)
(10.1
%)
569
(12.4
%)
Asia Pacific Total
177,102
80.1
%
183,431
80.5
%
(6,329
)
(3.5
%)
(929
)
(2.9
%)
Americas and Europe
43,981
19.9
%
44,529
19.5
%
(548
)
(1.2
%)
678
(2.8
%)
$
221,083
100.0
%
$
227,960
100.0
%
$
(6,877
)
(3.0
%)
$
(251
)
(2.9
%)
Active Associates by Region(1) (Unaudited)
As
of December 30, 2023 December 31, 2022 Asia
Pacific Greater China
70,000
35.0
%
74,000
34.1
%
Southeast Asia Pacific
52,000
26.0
%
62,000
28.6
%
North Asia
32,000
16.0
%
34,000
15.6
%
Asia Pacific Total
154,000
77.0
%
170,000
78.3
%
Americas and Europe
46,000
23.0
%
47,000
21.7
%
200,000
100.0
%
217,000
100.0
%
Active Preferred Customers by Region (2) (Unaudited)
As of December 30, 2023 December 31, 2022 Asia
Pacific Greater China
185,000
65.4
%
170,000
62.3
%
Southeast Asia Pacific
28,000
9.9
%
25,000
9.1
%
North Asia
16,000
5.6
%
19,000
7.0
%
Asia Pacific Total
229,000
80.9
%
214,000
78.4
%
Americas and Europe
54,000
19.1
%
59,000
21.6
%
283,000
100.0
%
273,000
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/20240206053693/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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