USANA Health Sciences, Inc. : USANA Health Sciences Announces Record First Quarter 2012 Financial Results and Raises 2012 Financial Outlook
04/24/2012| 04:15pm US/Eastern
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First quarter net sales increase by 7.4% to $154.1 million
Earnings per share increase by 28.6% to $0.90 for the quarter
Company raises 2012 financial outlook
USANA Health Sciences, Inc. (NYSE: USNA) today announced financial
results for its fiscal first quarter ended March 31, 2012.
Financial Performance
Net sales for the first quarter of 2012 increased by 7.4% to $154.1
million, compared with $143.6 million in the prior-year period. The
growth in net sales was driven by the Company's Asia Pacific region and
was partially offset by a modest decline in the North America region.
Net earnings for the first quarter increased to $13.8 million, or 21.2%,
compared with the prior-year period. This increase was due primarily to
higher net sales and lower relative Associate incentive expense.
Earnings per share for the quarter increased 28.6% to $0.90, compared
with $0.70 in the first quarter of the prior year. The improvement in
earnings per share resulted from higher net earnings and a lower number
of diluted shares outstanding due to the Company's share repurchases in
2011.
"Our business started the year off very strong and generated
top-and-bottom-line results that exceeded our expectations," said Mr.
Dave Wentz, Chief Executive Officer. "A temporary surge in sales ahead
of price increases in several Asia Pacific markets during the quarter
contributed meaningfully to our record results. During the quarter, our
management team continued to advance our strategic initiatives,
specifically: growing our Greater China region; executing our growth
strategy in North America; and driving new market expansion."
Regional Results
Net sales in the Asia Pacific region increased by 14.3% to $95.5
million, compared with $83.5 million for the first quarter of the prior
year. This improvement was due to strong sales growth in the
Philippines, South Korea, and Greater China. Results in Greater China
and Southeast Asia/Pacific were aided by a larger-than-anticipated surge
in sales ahead of price increases. The number of active Associates in
the Asia Pacific region increased by 9.2%, primarily due to significant
growth in the number of active Associates in the Philippines.
"We were pleased with the growth in our Asia Pacific region, which now
consists of 11 markets," continued Mr. Wentz. "We commenced operations
in Thailand during the quarter, and expect momentum to grow in this
market as we prepare to hold a grand opening event in June.
Additionally, we continued to execute our strategy in China during the
quarter by educating our Associates on our product offerings and
compensation plan in China."
During the first quarter of 2012, net sales in the North America region
decreased 2.3% to $58.6 million, compared with the first quarter of the
prior year. The number of Active Associates in North America declined by
7.2%, compared with the first quarter of 2011.
Mr. Wentz added, "We continue to execute our strategy in North America
by working to strengthen our sales force, advance our personalization
and marketing strategy, and implement incentive plans specifically for
North America. We remain optimistic that we will begin to see traction
in this region beginning as early as the fourth quarter of this year.
Additionally, with the opening of our France and Belgium markets at the
end of the quarter, our Associates in North America have an increased
opportunity to expand their businesses in Europe."
The Company continued its successful track record of generating
meaningful levels of cash from operations and ended the quarter
debt-free with approximately $71 million in cash and cash equivalents.
Cash generated from operations totaled $22.6 million for the quarter.
Outlook
The Company provided the following updated financial outlook for 2012:
Consolidated net sales between $610 million and $625 million, versus
previous outlook of $600 million and $615 million.
Earnings per share between $3.60 and $3.70, versus previous outlook of
$3.35 and $3.45.
Chief Financial Officer Doug Hekking commented, "In light of our strong
first quarter performance, we are raising our financial outlook for
fiscal 2012. As we continue to generate leverage in our operating model,
we expect our operating margin to be higher on a year-over-year basis."
Conference Call
USANA will hold a conference call and webcast to discuss this
announcement with investors on Wednesday, April 25, 2012 at 11:00 AM
Eastern Time. Investors may listen to the call by accessing USANA's
website at http://www.usanahealthsciences.com.
About USANA
USANA develops and manufactures high-quality nutritional, personal care,
and weight-management 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 and Belgium. More information on USANA can be found at http://www.usanahealthsciences.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, reliance upon our network of independent Associates, the
governmental regulation of our products, manufacturing and marketing
risks, adverse publicity risks, and risks associated with our
international expansion. 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.
USANA Health Sciences, Inc.
Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)
Quarter Ended
2-Apr-11
31-Mar-12
Net sales
$
143,566
$
154,120
Cost of sales
25,662
27,217
Gross profit
117,904
126,903
Operating expenses
Associate incentives
64,807
68,009
Selling, general and administrative
35,870
38,032
Earnings from operations
17,227
20,862
Other income (expense)
101
132
Earnings before income taxes
17,328
20,994
Income taxes
5,978
7,243
NET EARNINGS
$
11,350
$
13,751
Earnings per share - diluted
$
0.70
$
0.90
Weighted average shares outstanding - diluted
16,217
15,288
USANA Health Sciences, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of
As of
31-Dec-11
31-Mar-12
ASSETS
Current Assets
Cash and cash equivalents
$
50,353
$
71,164
Inventories
36,968
35,286
Other current assets
18,738
18,884
Total current assets
106,059
125,334
Property and equipment, net
60,754
61,188
Goodwill
17,740
17,776
Intangible assets, net
42,637
42,495
Deferred income taxes
11,033
11,248
Other assets
6,273
6,471
Total assets
$
244,496
$
264,512
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
$
7,952
$
7,572
Other current liabilities
51,744
54,817
Total current liabilities
59,696
62,389
Other long-term liabilities
942
901
Deferred income taxes
9,948
10,160
Stockholders' equity
173,910
191,062
Total liabilities and stockholders' equity
$
244,496
$
264,512
USANA Health Sciences, Inc.
Sales by Region
(Unaudited)
(In thousands)
Quarter Ended
2-Apr-11
31-Mar-12
Region
North America
60,021
41.8
%
58,632
38.1
%
Asia Pacific
Southeast Asia/Pacific
24,694
17.2
%
32,252
20.9
%
Greater China
52,111
36.3
%
56,635
36.7
%
North Asia
6,740
4.7
%
6,601
4.3
%
Asia Pacific Total
83,545
58.2
%
95,488
61.9
%
Total
$
143,566
100.0
%
$
154,120
100.0
%
Active Associates by Region (1)
(Unaudited)
As of
2-Apr-11
31-Mar-12
Region
North America
83,000
39.0
%
77,000
35.1
%
Asia Pacific
Southeast Asia/Pacific
40,000
18.8
%
51,000
23.3
%
Greater China
82,000
38.5
%
83,000
37.9
%
North Asia
8,000
3.7
%
8,000
3.7
%
Asia Pacific Total
130,000
61.0
%
142,000
64.9
%
Total
213,000
100.0
%
219,000
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 product at any time
during the most recent three-month period, either for personal use
or for resale.
Active Preferred Customers by Region (2)
(Unaudited)
As of
2-Apr-11
31-Mar-12
Region
North America
55,000
78.6
%
53,000
79.1
%
Asia Pacific
Southeast Asia/Pacific
6,000
8.6
%
6,000
9.0
%
Greater China
8,000
11.4
%
7,000
10.4
%
North Asia
1,000
1.4
%
1,000
1.5
%
Asia Pacific Total
15,000
21.4
%
14,000
20.9
%
Total
70,000
100.0
%
67,000
100.0
%
(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 product at any time during the most recent three-month
period.
USANA Health Sciences, Inc. Investors contact: Patrique
Richards, 801-954-7961 Investor Relations investor.relations@us.usana.com Media
contact: Dan Macuga, 801-954-7280 Public Relations
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