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USANA Health Sciences Reports Record Second Quarter Results and Reiterates Growth Outlook for FY 2021

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SALT LAKE CITY, July 27, 2021--(BUSINESS WIRE)--USANA Health Sciences, Inc. (NYSE: USNA) today announced record financial results for its fiscal second quarter ended July 3, 2021.

Key Financial & Operating Highlights

  • Second quarter net sales increased 30.1% year-over-year to a record $336.8 million.

  • Second quarter diluted EPS increased 41.7% year-over-year to $1.87.

  • Active Customers increased 8.8% year-over-year to a record 652,000.

  • Reiterates 2021 net sales and diluted EPS outlook.

Q2 2021 Financial Performance

Consolidated Results

Net Sales

$336.8 million

Diluted EPS

$1.87

Active Customers

652,000

"Strong consumer demand for our high-quality health products, coupled with the execution of our previously announced short-term sales program, contributed to our record net sales and customer numbers for the second quarter," said Kevin Guest, Chief Executive Officer and Chairman of the Board. "Our-top line performance was driven by strong double-digit, year-over-year sales growth in each of our regions including a 16.5% increase in the Americas and Europe region and a 33.3% increase in the Asia Pacific region.

Q2 2021 Regional Results:

Asia Pacific Region

Net Sales

$279.0 million

Active Customers

513,000

Asia Pacific Sub-Regions

Greater China

Net Sales

$165.4 million

Active Customers

303,000

North Asia

Net Sales

$37.4 million

Active Customers

66,000

Southeast Asia Pacific

Net Sales

$76.1 million

Active Customers

144,000

Americas and Europe Region

Net Sales

$57.9 million

Active Customers

139,000

Mr. Guest added, "We continue to execute our strategy to enhance the overall shopping experience for customers in all of our markets and made further progress on this initiative during the quarter. Additionally, the rollout of our Active Nutrition line, which was introduced in late March, is proceeding according to plan. As we look ahead to the second half of the year, we are seeing a more challenging operating environment in several markets due to escalating conditions related to the COVID-19 pandemic. We believe, however, that the successful execution of our strategy will deliver long-term sustainable growth."

Balance Sheet and Share Repurchase Activity

The Company ended the quarter with $265 million in cash and cash equivalents and no debt after repurchasing 304,000 shares for $29.7 million. Diluted shares outstanding totaled 20.4 million during the second quarter of 2021 and there was approximately $51 million remaining under the existing share repurchase authorization as of July 3, 2021.

Fiscal 2021 Outlook

The Company is reiterating its consolidated net sales and earnings per share outlook for fiscal year 2021.

Fiscal Year 2021 Outlook

Range

Consolidated Net Sales

$1.24 - $1.28 billion

Diluted EPS

$6.15 - $6.50

The Company maintains a 52/53-week fiscal year. Fiscal 2020 was a 53-week year and included one additional week of sales in the fourth quarter of 2020 compared to Fiscal 2021.

Doug Hekking, Chief Financial Officer, said, "Our record second quarter results, highlighted by robust sales and earnings-per-share growth, were in-line with management’s expectations and were driven, in large part, by the sales program offered during the quarter. A similar sales program was offered during the third quarter of 2020, which was also very successful. Note that the timing of the 2020 sales program, as well as the additional week of sales in the fourth quarter of 2020, create a challenging comparable for us in the back half of 2021. Nevertheless, we continue to believe that 2021 will be another record year for USANA."

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, July 28, 2021 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 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

Six Months Ended

3-Jul-21

27-Jun-20

3-Jul-21

27-Jun-20

Net sales

$

336,837

$

258,991

$

644,813

$

525,610

Cost of sales

57,014

47,674

114,665

93,733

Gross profit

279,823

211,317

530,148

431,877

Operating expenses

Associate incentives

153,863

110,852

288,358

226,921

Selling, general and administrative

72,240

60,879

143,873

126,358

Earnings from operations

53,720

39,586

97,917

78,598

Other income (expense)

590

393

729

544

Earnings before income taxes

54,310

39,979

98,646

79,142

Income taxes

16,076

12,002

29,791

24,613

NET EARNINGS

$

38,234

$

27,977

$

68,855

$

54,529

Earnings per share - diluted

$

1.87

$

1.32

$

3.31

$

2.56

Weighted average shares outstanding - diluted

20,446

21,129

20,771

21,340

USANA Health Sciences, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

As of

As of

ASSETS

3-Jul-21

2-Jan-21

Current Assets

Cash and cash equivalents

$

265,368

$

311,917

Inventories

89,587

90,224

Prepaid expenses and other current assets

26,551

23,145

Total current assets

381,506

425,286

Property and equipment, net

97,849

100,445

Goodwill

17,467

17,367

Intangible assets, net

30,489

30,796

Deferred income taxes

5,486

4,640

Other assets

58,652

62,353

Total assets

$

591,449

$

640,887

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable

$

13,144

$

18,195

Other current liabilities

139,856

149,878

Total current liabilities

153,000

168,073

Deferred income taxes

4,806

12,009

Other long-term liabilities

15,020

19,155

Stockholders' equity

418,623

441,650

Total liabilities and stockholders' equity

$

591,449

$

640,887

USANA Health Sciences, Inc.

Sales by Region

(unaudited)

(in thousands)

Quarter Ended

July 3, 2021

June 27, 2020

Change from prior

year

Currency

impact on

sales

% change

excluding

currency

impact

Asia Pacific

Greater China

$

165,416

49.1%

$

124,001

47.9%

$

41,415

33.4%

$

13,459

22.5%

Southeast Asia Pacific

76,101

22.6%

59,459

22.9%

16,642

28.0%

5,225

19.2%

North Asia

37,438

11.1%

25,852

10.0%

11,586

44.8%

2,906

33.6%

Asia Pacific Total

278,955

82.8%

209,312

80.8%

69,643

33.3%

21,590

23.0%

Americas and Europe

57,882

17.2%

49,679

19.2%

8,203

16.5%

3,610

9.2%

$

336,837

100.0%

$

258,991

100.0%

$

77,846

30.1%

$

25,200

20.3%

Active Associates by Region(1)

(unaudited)

As of

July 3, 2021

June 27, 2020

Asia Pacific

Greater China

88,000

29.3%

93,000

32.3%

Southeast Asia Pacific

104,000

34.7%

94,000

32.6%

North Asia

42,000

14.0%

37,000

12.9%

Asia Pacific Total

234,000

78.0%

224,000

77.8%

Americas and Europe

66,000

22.0%

64,000

22.2%

300,000

100.0%

288,000

100.0%

Active Preferred Customers by Region (2)

(unaudited)

As of

July 3, 2021

June 27, 2020

Asia Pacific

Greater China

215,000

61.1%

185,000

59.5%

Southeast Asia Pacific

40,000

11.4%

35,000

11.3%

North Asia

24,000

6.8%

19,000

6.1%

Asia Pacific Total

279,000

79.3%

239,000

76.9%

Americas and Europe

73,000

20.7%

72,000

23.1%

352,000

100.0%

311,000

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/20210727006016/en/

Contacts

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

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