USANA Health Sciences Announces Record First Quarter Financial Results

  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
investor.relations@us.usana.com
Media contact:
Dan Macuga, 801-954-7280
Public Relations
 
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