SALT LAKE CITY--(BUSINESS WIRE)--USANA Health Sciences, Inc. (NYSE: USNA) today announced record financial results for its fiscal third quarter ended October 3, 2015.
For the third quarter of 2015, net sales increased to $233.3 million, up 21.5% compared with $191.9 million in the prior-year period. The increase in net sales was driven by 39.2% growth in the number of active Associates and 15.6% growth in the number of Preferred Customers. Fluctuations in currency exchange rates negatively impacted net sales by $18.3 million year-over-year and $7.3 million on a sequential quarter basis. Third quarter net sales increased 31.1% year-over-year on a constant currency basis.
Net earnings for the third quarter increased by 31.3% to $25.6 million, compared with $19.5 million during the prior-year period. The increase in net earnings was driven by higher net sales, improved gross margins and lower relative selling, general and administrative expense, which were partially offset by higher relative Associate Incentives expense and a higher effective tax rate.
Earnings per diluted share for the third quarter increased 30.6% to $1.92, compared with $1.47 in the prior year period. The increase in earnings per share was attributable to higher net earnings. Weighted average diluted shares outstanding were 13.3 million as of the end of the third quarter of 2015, and were essentially unchanged compared with the prior-year period. During the third quarter of 2015, the Company did not repurchase any shares of common stock. The Company ended the third quarter with $174.2 million in cash and cash equivalents, zero debt and $61.2 million remaining under the current share repurchase authorization.
“We continued to see strong momentum in our business during the third quarter and achieved our fourth consecutive quarter of double-digit sales, earnings and customer growth,” said Dave Wentz, USANA’s Co-CEO. “While currency fluctuations negatively impacted our reported results, we generated strong local currency sales growth in nearly all of our markets. Our results continue to be driven by our strategies for customer growth, which is our highest priority as we seek to improve the overall health and nutrition of our customers around the world.”
Net sales in the Asia Pacific region increased by 29.1% to $168.2 million, despite a negative impact of $11.8 million due to the strengthening of the U.S. dollar. Southeast Asia Pacific incurred 65% of the total impact of currency fluctuations. Sales increased 45.5% in the Greater China region, 3.3% in the Southeast Asia Pacific region, and 16.3% in the North Asia region.
Sales growth in Greater China was driven by strong customer growth in Mainland China, while growth in Southeast Asia Pacific resulted from double-digit customer growth in nearly every market in the region. Finally, sales growth in North Asia was driven by 50% customer growth in South Korea. The number of active Associates in the Asia Pacific region increased by 51.2% year-over-year, and 2.6% sequentially.
Net sales in the Americas/Europe region increased by 5.5% to $65.1 million and were negatively impacted by $6.5 million due to the strengthening of the U.S. dollar. Canada and Mexico each generated double-digit customer and local currency sales growth in the third quarter, compared with the prior year period. Both sales and customer count improved modestly in the U.S.
“Our consistent growth reflects the demand for USANA’s best-in-class products and rewarding business opportunity,” said Kevin Guest, USANA’s Co-CEO. “During the quarter, we held our annual International Convention in Salt Lake City where we celebrated the achievements of our Associates with a record number of attendees. During the fourth quarter, we will officially open Indonesia, our 20th market, and hold our China National Meeting. Mainland China continues to be a key driver of our growth and we anticipate another amazing event with record attendance.”
The Company provided the following updated consolidated net sales and earnings per share outlook for 2015:
- Consolidated net sales between $915 million and $920 million, versus the previous outlook of between $900 million and $920 million
- Earnings per share between $7.25 and $7.35, versus the previous outlook of between $6.90 and $7.20
The Company has posted the “Management Commentary, Results and Outlook” document on the Company’s website (www.usanahealthsciences.com) under the “Investor Relations” section of the site. USANA will hold a conference call and webcast to discuss today’s announcement with investors on Wednesday, November 4, 2015 at 11:00 AM Eastern Time. Investors may listen to the call by accessing USANA’s website at http://www.usanahealthsciences.com. The call will consist of brief opening remarks by the Company’s management team, before moving directly into questions and answers.
USANA develops and manufactures high-quality nutritional supplements, healthy 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 and Colombia. 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)|
|Quarter Ended||Nine Months Ended|
|Cost of sales||34,585||41,048||103,278||119,501|
|Selling, general and administrative||45,499||52,757||133,282||155,137|
|Earnings from operations||29,255||37,966||83,464||106,525|
|Other income (expense)||(297||)||441||125||523|
|Earnings before income taxes||28,958||38,407||83,589||107,048|
|Earnings per share - diluted||$||1.47||$||1.92||$||3.96||$||5.35|
|Weighted average shares outstanding - diluted||13,263||13,317||13,964||13,209|
|USANA Health Sciences, Inc.|
|Consolidated Balance Sheets|
|As of||As of|
|Cash and cash equivalents||$||111,126||$||174,195|
|Prepaid expenses and other current assets||34,553||34,049|
|Total current assets||190,927||269,824|
|Property and equipment, net||71,164||78,525|
|Intangible assets, net||40,952||39,506|
|Deferred income taxes||5,933||8,352|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Other current liabilities||100,926||104,967|
|Total current liabilities||108,705||114,465|
|Other long-term liabilities||1,114||1,044|
|Deferred income taxes||10,601||10,030|
|Total liabilities and stockholders' equity||$||350,584||$||438,928|
|USANA Health Sciences, Inc.|
|Sales by Region|
|27-Sep-14||3-Oct-15||Change from prior year||Change on constant currency basis|
|Southeast Asia Pacific||44,488||23.2||%||45,936||19.7||%||1,448||3.3||%||7,735||20.6||%|
|Asia Pacific Total||130,221||67.8||%||168,179||72.1||%||37,958||29.1||%||11,817||38.2||%|
|Americas and Europe||61,723||32.2||%||65,113||27.9||%||3,390||5.5||%||6,483||16.0||%|
|Active Associates by Region (1)|
|Southeast Asia Pacific||70,000||24.1||%||85,000||21.0||%|
|Asia Pacific Total||209,000||71.8||%||316,000||78.0||%|
|Americas and Europe||82,000||28.2||%||89,000||22.0||%|
|(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 for resale.|
|Active Preferred Customers by Region (2)|
|Southeast Asia Pacific||11,000||14.3||%||13,000||14.6||%|
|Asia Pacific Total||20,000||26.0||%||26,000||29.2||%|
|Americas and Europe||57,000||74.0||%||63,000||70.8||%|
|(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.|