USANA Health Sciences Announces Record First Quarter Financial Results *Net sales increased by 9.7% to $169.1 million *Net earnings increased by 29.3%, while earnings per share increased by 42.2% to $1.28 *Company raises 2013 financial outlook Business Wire SALT LAKE CITY -- April 23, 2013 USANA Health Sciences, Inc. (NYSE: USNA) today announced record financial results for its fiscal first quarter ended March 30, 2013. Financial Performance Net sales for the first quarter of 2013 increased by 9.7% to $169.1 million, compared with $154.1 million in the prior-year period. This growth in net sales was driven by increases in both the Company’s Asia Pacific and North America/Europe regions. Favorable changes in currency exchange rates also contributed approximately $900,000 to the top line for the quarter. Net earnings for the first quarter increased to $17.8 million, an improvement of 29.3%, compared with the prior-year period. This increase was due primarily to higher net sales and lower relative Associate incentive expense for the quarter. The relative decrease in Associate incentives expense was attributable to the change to the lifetime matching bonus program, which is now fully implemented. Earnings per share for the quarter increased by 42.2% to $1.28, compared with $0.90 in the first quarter of the prior year. This improvement in earnings per share was attributable to higher net earnings and a lower number of diluted shares outstanding, which resulted from the Company’s share repurchases over the last 12 months. Total diluted common shares outstanding as of March 30, 2013 were 13.9 million, compared with 15.3 million as of March 31, 2012. The Company’s Chief Executive Officer, Dave Wentz, said, “For the first quarter of 2013 USANA again delivered record results in sales and earnings per share. During the quarter, our management team continued to execute our strategic initiatives, which are focused on generating worldwide customer growth, growing our Greater China region, advancing our personalization initiatives, and driving new market expansion.” Regional Results Net sales in Asia Pacific increased by 9.9% to $104.9 million, compared with $95.5 million for the first quarter of the prior year. This improvement was due to strong sales growth in our Greater China and Southeast Asia Pacific regions, which was driven by a 6.3% increase in the number of active Associates in Asia Pacific. “We continue to see solid growth in Asia Pacific, with double-digit local currency growth in several of our markets in that region,” continued Mr. Wentz. “We remain focused on growing our Greater China region, and are pleased to have received during the quarter government approval in mainland China to expand our direct selling activities in three additional provinces. We continue to be optimistic about our growth opportunity in this region, as we expand our customer base and the reach of our world-class products.” During the first quarter of 2013, net sales in North America/Europe increased by 9.4% to $64.2 million, compared with $58.6 million in the prior-year period. The number of Active Associates in North America/Europe increased 1.3% and the number of Preferred Customers increased 3.8% during the first quarter, compared with the first quarter of 2012. Mr. Wentz added, “We continue to see improvement in our operating trends in North America, particularly in our top-line results. During the quarter, we saw double-digit sales growth in the U.S. and Mexico, as well as strong Associate growth in Mexico. Our focus continues to be on increasing active Associate counts in the U.S. and Canada, and we have several initiatives planned during 2013 to accomplish this objective. We are also excited to announce the addition of Colombia to this region, which we expect to open in the third quarter of 2013. We believe Colombia will be a successful market for USANA and an excellent entry point into South America.” The Company maintained its successful track record of generating meaningful levels of cash from operations and ended the quarter with $71 million in cash and cash equivalents. For the first quarter, cash generated from operations totaled $20.3 million. During the quarter, the Company invested $18.1 million to repurchase 414,000 shares of the Company’s common stock. Outlook The Company reiterated consolidated net sales outlook and provided the following updated earnings per share outlook for 2013: *Consolidated net sales between $700 million and $720 million *Earnings per share between $5.25 and $5.40, versus the previous outlook of between $5.10 and $5.25 Chief Financial Officer, Paul Jones, commented, “Our first quarter financial results are a strong start to what we expect will be another record year for USANA. As we work to accomplish each of our strategic initiatives in 2013, we will continue to invest in our personalization and customer growth strategies, which will include offering region-specific incentives to our Associate sales force. As demonstrated by our increased earnings per share outlook for 2013, we continue to anticipate growth in sales and earnings during the current year.” Conference Call USANA will hold a conference call and webcast to discuss this announcement with investors on Wednesday, April 24, 2013 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 31-Mar-12 30-Mar-13 Net sales $ 154,120 $ 169,082 Cost of sales 27,217 30,261 Gross profit 126,903 138,821 Operating expenses Associate incentives 68,009 69,855 Selling, general and administrative 38,032 42,404 Earnings from operations 20,862 26,562 Other income (expense) 132 (26 ) Earnings before income taxes 20,994 26,536 Income taxes 7,243 8,757 NET EARNINGS $ 13,751 $ 17,779 Earnings per share - diluted $ 0.90 $ 1.28 Weighted average shares outstanding - diluted 15,288 13,903 USANA Health Sciences, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) As of As of 29-Dec-12 30-Mar-13 ASSETS Current Assets Cash and cash equivalents $ 70,839 $ 71,047 Inventories 36,481 42,974 Other current assets 25,225 19,633 Total current assets 132,545 133,654 Property and equipment, net 61,751 60,715 Goodwill 17,890 17,933 Intangible assets, net 42,085 41,963 Deferred income taxes 5,956 6,149 Other assets 7,128 8,243 Total assets $ 267,355 $ 268,657 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 7,040 $ 8,152 Other current liabilities 63,804 61,894 Total current liabilities 70,844 70,046 Other long-term liabilities 938 909 Deferred income taxes 10,001 10,054 Stockholders' equity 185,572 187,648 Total liabilities and stockholders' equity $ 267,355 $ 268,657 USANA Health Sciences, Inc. Sales by Region (Unaudited) (In thousands) Quarter Ended 31-Mar-12 30-Mar-13 Region North America / $ 58,632 38.1 % $ 64,152 37.9 % Europe Asia Pacific Southeast Asia 32,252 20.9 % 35,309 20.9 % Pacific Greater 56,635 36.7 % 62,985 37.3 % China North Asia 6,601 4.3 % 6,636 3.9 % Asia Pacific 95,488 61.9 % 104,930 62.1 % Total Total $ 154,120 100.0 % $ 169,082 100.0 % Active Associates by Region ^(1) (Unaudited) As of 31-Mar-12 30-Mar-13 Region North America / 77,000 35.1 % 78,000 34.1 % Europe Asia Pacific Southeast Asia 51,000 23.3 % 56,000 24.4 % Pacific Greater 83,000 37.9 % 87,000 38.0 % China North Asia 8,000 3.7 % 8,000 3.5 % Asia Pacific 142,000 64.9 % 151,000 65.9 % Total Total 219,000 100.0 % 229,000 100.0 % (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 31-Mar-12 30-Mar-13 Region North America / 53,000 79.1 % 55,000 82.1 % Europe Asia Pacific Southeast Asia 6,000 9.0 % 7,000 10.4 % Pacific Greater 7,000 10.4 % 3,000 4.5 % China North Asia 1,000 1.5 % 2,000 3.0 % Asia Pacific 14,000 20.9 % 12,000 17.9 % Total Total 67,000 100.0 % 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. Contact: USANA Health Sciences, Inc. Investors contact: Patrique Richards, 801-954-7961 Investor Relations firstname.lastname@example.org Media contact: Dan Macuga, 801-954-7280 Public Relations
USANA Health Sciences Announces Record First Quarter Financial Results
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