SALT LAKE CITY--(BUSINESS WIRE)--USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal first quarter ended March 31, 2012.
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.”
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.
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.”
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.
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.
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)|
|Cost of sales||25,662||27,217|
|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|
|Earnings per share - diluted||$||0.70||$||0.90|
|Weighted average shares outstanding - diluted||16,217||15,288|
|USANA Health Sciences, Inc.|
|Consolidated Balance Sheets|
|As of||As of|
|Cash and cash equivalents||$||50,353||$||71,164|
|Other current assets||18,738||18,884|
|Total current assets||106,059||125,334|
|Property and equipment, net||60,754||61,188|
|Intangible assets, net||42,637||42,495|
|Deferred income taxes||11,033||11,248|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Other current liabilities||51,744||54,817|
|Total current liabilities||59,696||62,389|
|Other long-term liabilities||942||901|
|Deferred income taxes||9,948||10,160|
|Total liabilities and stockholders' equity||$||244,496||$||264,512|
|USANA Health Sciences, Inc.|
|Sales by Region|
|Asia Pacific Total||83,545||58.2||%||95,488||61.9||%|
|Active Associates by Region (1)|
|Asia Pacific Total||130,000||61.0||%||142,000||64.9||%|
|(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)|
|Asia Pacific Total||15,000||21.4||%||14,000||
|(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.|