Full Press Release Details
USANA Health Sciences Reports Record Second Quarter Results and Reiterates Growth Outlook for FY 2021
SALT LAKE CITY--(BUSINESS WIRE)--July 27, 2021--USANA Health Sciences, Inc. (NYSE: USNA) today announced record financial results for its fiscal second quarter ended July 3, 2021.
Key Financial & Operating Highlights
Second quarter net sales increased 30.1% year-over-year to a record $336.8 million.
Second quarter diluted EPS increased 41.7% year-over-year to $1.87.
Active Customers increased 8.8% year-over-year to a record 652,000.
Reiterates 2021 net sales and diluted EPS outlook.
Q2 2021 Financial Performance
| Consolidated Results | ||
| Net Sales | $336.8 million | +30.1% vs. prior-year quarter +20.3% constant currency vs. prior-year quarter +$25.2 million YOY FX impact, or +9.8% |
| Diluted EPS | $1.87 | +41.7% vs. prior-year quarter Diluted shares of 20.4 million, -3.2% |
| Active Customers | 652,000 | +8.8% vs. prior-year quarter |
"Strong consumer demand for our high-quality health products, coupled with the execution of our previously announced short-term sales program, contributed to our record net sales and customer numbers for the second quarter," said Kevin Guest,
Chief Executive Officer and Chairman of the Board. "Our-top line performance was driven by strong double-digit, year-over-year sales growth in each of our regions including a 16.5% increase in the Americas and Europe region and a 33.3% increase
in the Asia Pacific region.
Q2 2021 Regional Results:
| Asia Pacific Region | ||
| Net Sales | $279.0 million | +33.3% vs. prior-year quarter Constant currency net sales: +23.0% 82.8% of consolidated net sales |
| Active Customers | 513,000 | +10.8% vs. prior-year quarter +8.6% sequentially |
| Asia Pacific Sub-Regions | ||
| Greater China | ||
| Net Sales | $165.4 million | +33.4% vs. prior-year quarter Constant currency net sales: +22.5% |
| Active Customers | 303,000 | +9.0% vs. prior-year quarter +9.8% sequentially |
| North Asia | ||
| Net Sales | $37.4 million | +44.8% vs. prior-year quarter Constant currency net sales: +33.6% |
| Active Customers | 66,000 | +17.9% vs. prior-year quarter +11.9% sequentially |
| Southeast Asia Pacific | ||
| Net Sales | $76.1 million | +28.0% vs. prior-year quarter Constant currency net sales: +19.2% |
| Active Customers | 144,000 | +11.6% vs. prior-year quarter +5.1% sequentially |
| Americas and Europe Region | ||
| Net Sales | $57.9 million | +16.5% vs. prior year Constant currency net sales: +9.2% 17.2% of consolidated net sales |
| Active Customers | 139,000 | +2.2% vs. prior year -4.1% sequentially |
Mr. Guest added, "We continue to execute our strategy to enhance the overall shopping experience for customers in all of our markets and made further progress on this initiative during the quarter. Additionally, the rollout of our Active
Nutrition line, which was introduced in late March, is proceeding according to plan. As we look ahead to the second half of the year, we are seeing a more challenging operating environment in several markets due to escalating conditions related
to the COVID-19 pandemic. We believe, however, that the successful execution of our strategy will deliver long-term sustainable growth."
Balance Sheet and Share Repurchase Activity
The Company ended the quarter with $265 million in cash and cash equivalents and no debt after repurchasing 304,000 shares for $29.7 million. Diluted shares outstanding totaled 20.4 million during the second quarter of 2021 and there was
approximately $51 million remaining under the existing share repurchase authorization as of July 3, 2021.
The Company is reiterating its consolidated net sales and earnings per share outlook for fiscal year 2021.
| Fiscal Year 2021 Outlook | |
| Range | |
| Consolidated Net Sales | $1.24 - $1.28 billion |
| Diluted EPS | $6.15 - $6.50 |
The Company maintains a 52/53-week fiscal year. Fiscal 2020 was a 53-week year and included one additional week of sales in the fourth quarter of 2020 compared to Fiscal 2021.
Doug Hekking, Chief Financial Officer, said, "Our record second quarter results, highlighted by robust sales and earnings-per-share growth, were in-line with management's expectations and were driven, in large part, by the sales program
offered during the quarter. A similar sales program was offered during the third quarter of 2020, which was also very successful. Note that the timing of the 2020 sales program, as well as the additional week of sales in the fourth quarter of
2020, create a challenging comparable for us in the back half of 2021. Nevertheless, we continue to believe that 2021 will be another record year for USANA."
Management Commentary Document and Conference Call
For more information on the USANA's operating results, please see the Management Commentary document, which has been posted on the Company's website (http://ir.usana.com) under the Investor Relations section. USANA's management team will hold
a conference call and webcast to discuss today's announcement with investors on Wednesday, July 28, 2021 at 11:00 AM Eastern Time. Investors may listen to the call by accessing USANA's website at http://ir.usana.com. The call will
consist of brief opening remarks by the Company's management team, followed by a questions and answers session.
Non-GAAP Financial Measures
The Company prepares its financial statements using U.S. generally accepted accounting principles ("GAAP"). Constant currency net sales, earnings, EPS and other currency-related financial information (collectively, "Financial Results") are
non-GAAP financial measures that remove the impact of fluctuations in foreign-currency exchange rates ("FX") and help facilitate period-to-period comparisons of the Company's Financial Results that we believe provide investors an additional
perspective on trends and underlying business results. Constant currency Financial Results are calculated by translating the current period's Financial Results at the same average exchange rates in effect during the applicable prior-year period
and then comparing this amount to the prior-year period's Financial Results.
USANA develops and manufactures high-quality nutritional supplements, functional 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, Colombia, Indonesia, Germany, Spain, Romania, and Italy. More information on USANA can be
found at www.usana.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: uncertainty related to the magnitude, scope and duration of the impact of the COVID-19 pandemic ("COVID-19") to our business, operations and financial
results; the further spread of, and regulatory measures or voluntary actions that may be put in place to limit the spread of, COVID-19 in the markets where we operate, including restrictions on business operations, shelter at home, or social
distancing requirements; the potential for a resurgence of COVID-19 spread in any of our markets in the future; the impact of COVID-19 on the domestic and world economies, including any negative impact on discretionary spending, consumer
demand, and consumer behavior in general; regulatory risk in China in connection with the health products and direct selling business models; regulatory risk in the United States in connection with the direct selling business model; potential
negative effects of deteriorating foreign and/or trade relations between the United States and China; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material
failures of our information technology systems; global economic conditions generally; reliance upon our network of independent Associates; risk associated with governmental regulation of our products, manufacturing and direct selling business
model; adverse publicity risks globally; risks associated with our international expansion and operations; and uncertainty relating to the fluctuation in U.S. and other international currencies. 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. The forward-looking statements in this press release set forth our beliefs as
of the date hereof. We do not undertake any obligation to update any forward-looking statement after the date hereof or to conform such statements to actual results or changes in the Company's expectations, except as required by law.
| USANA Health Sciences, Inc. | ||||||||||||
| Consolidated Statements of Operations | ||||||||||||
| (In thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||
| 3-Jul-21 | 27-Jun-20 | 3-Jul-21 | 27-Jun-20 | |||||||||
| Net sales | $ | 336,837 | $ | 258,991 | $ | 644,813 | $ | 525,610 | ||||
| Cost of sales | 57,014 | 47,674 | 114,665 | 93,733 | ||||||||
| Gross profit | 279,823 | 211,317 | 530,148 | 431,877 | ||||||||
| Operating expenses | ||||||||||||
| Associate incentives | 153,863 | 110,852 | 288,358 | 226,921 | ||||||||
| Selling, general and administrative | 72,240 | 60,879 | 143,873 | 126,358 | ||||||||
| Earnings from operations | 53,720 | 39,586 | 97,917 | 78,598 | ||||||||
| Other income (expense) | 590 | 393 | 729 | 544 | ||||||||
| Earnings before income taxes | 54,310 | 39,979 | 98,646 | 79,142 | ||||||||
| Income taxes | 16,076 | 12,002 | 29,791 | 24,613 | ||||||||
| NET EARNINGS | $ | 38,234 | $ | 27,977 | $ | 68,855 | $ | 54,529 | ||||
| Earnings per share - diluted | $ | 1.87 | $ | 1.32 | $ | 3.31 | $ | 2.56 | ||||
| Weighted average shares outstanding - diluted | 20,446 | 21,129 | 20,771 | 21,340 |
| USANA Health Sciences, Inc. | ||||||
| Consolidated Balance Sheets | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| As of | As of | |||||
| ASSETS | 3-Jul-21 | 2-Jan-21 | ||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 265,368 | $ | 311,917 | ||
| Inventories | 89,587 | 90,224 | ||||
| Prepaid expenses and other current assets | 26,551 | 23,145 | ||||
| Total current assets | 381,506 | 425,286 | ||||
| Property and equipment, net | 97,849 | 100,445 | ||||
| Goodwill | 17,467 | 17,367 | ||||
| Intangible assets, net | 30,489 | 30,796 | ||||
| Deferred income taxes | 5,486 | 4,640 | ||||
| Other assets | 58,652 | 62,353 | ||||
| Total assets | $ | 591,449 | $ | 640,887 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 13,144 | $ | 18,195 | ||
| Other current liabilities | 139,856 | 149,878 | ||||
| Total current liabilities | 153,000 | 168,073 | ||||
| Deferred income taxes | 4,806 | 12,009 | ||||
| Other long-term liabilities | 15,020 | 19,155 | ||||
| Stockholders' equity | 418,623 | 441,650 | ||||
| Total liabilities and stockholders' equity | $ | 591,449 | $ | 640,887 |
| USANA Health Sciences, Inc. | |||||||||||||||||||
| Sales by Region | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Quarter Ended | |||||||||||||||||||
| July 3, 2021 | June 27, 2020 | Change from prior year | Currency impact on sales | % change excluding currency impact | |||||||||||||||
| Asia Pacific | |||||||||||||||||||
| Greater China | $ | 165,416 | 49.1% | $ | 124,001 | 47.9% | $ | 41,415 | 33.4% | $ | 13,459 | 22.5% | |||||||
| Southeast Asia Pacific | 76,101 | 22.6% | 59,459 | 22.9% | 16,642 | 28.0% | 5,225 | 19.2% | |||||||||||
| North Asia | 37,438 | 11.1% | 25,852 | 10.0% | 11,586 | 44.8% | 2,906 | 33.6% | |||||||||||
| Asia Pacific Total | 278,955 | 82.8% | 209,312 | 80.8% | 69,643 | 33.3% | 21,590 | 23.0% | |||||||||||
| Americas and Europe | 57,882 | 17.2% | 49,679 | 19.2% | 8,203 | 16.5% | 3,610 | 9.2% | |||||||||||
| $ | 336,837 | 100.0% | $ | 258,991 | 100.0% | $ | 77,846 | 30.1% | $ | 25,200 | 20.3% | ||||||||
| Active Associates by Region (1) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| As of | |||||||||||||||||||
| July 3, 2021 | June 27, 2020 | ||||||||||||||||||
| Asia Pacific | |||||||||||||||||||
| Greater China | 88,000 | 29.3% | 93,000 | 32.3% | |||||||||||||||
| Southeast Asia Pacific | 104,000 | 34.7% | 94,000 | 32.6% | |||||||||||||||
| North Asia | 42,000 | 14.0% | 37,000 | 12.9% | |||||||||||||||
| Asia Pacific Total | 234,000 | 78.0% | 224,000 | 77.8% | |||||||||||||||
| Americas and Europe | 66,000 | 22.0% | 64,000 | 22.2% | |||||||||||||||
| 300,000 | 100.0% | 288,000 | 100.0% | ||||||||||||||||
| Active Preferred Customers by Region (2) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| As of | |||||||||||||||||||
| July 3, 2021 | June 27, 2020 | ||||||||||||||||||
| Asia Pacific | |||||||||||||||||||
| Greater China | 215,000 | 61.1% | 185,000 | 59.5% | |||||||||||||||
| Southeast Asia Pacific | 40,000 | 11.4% | 35,000 | 11.3% | |||||||||||||||
| North Asia | 24,000 | 6.8% | 19,000 | 6.1% | |||||||||||||||
| Asia Pacific Total | 279,000 | 79.3% | 239,000 | 76.9% | |||||||||||||||
| Americas and Europe | 73,000 | 20.7% | 72,000 | 23.1% | |||||||||||||||
| 352,000 | 100.0% | 311,000 | 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 from us any time during the most recent three-month period, either for personal use or resale. | |||||||||||||||||||
| (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. China utilizes a Preferred Customer program that has been implemented specifically for that market. |