USANA Health Sciences Announces Record Second Quarter 2012 Financial Results

  • Second quarter net sales increased by 8.0% to $160.9 million
  • Earnings per share increased by 26.1% to $1.11 for the quarter
  • Company raises 2012 financial outlook

SALT LAKE CITY--(BUSINESS WIRE)-- USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal second quarter ended June 30, 2012.

Financial Performance

Net sales for the second quarter of 2012 increased by 8.0% to $160.9 million, compared with $148.9 million in the prior-year period. The growth in net sales was driven by increases in both the Company’s Asia Pacific and North America & Europe regions. Changes in currency exchange rates reduced net sales by $2.7 million.

Net earnings for the second quarter increased to $16.7 million, an increase of 20.9%, compared with the prior-year period. This increase was due primarily to higher net sales, improved gross margins, lower relative Associate incentive expense, and a lower effective tax rate. Earnings per share for the quarter increased 26.1% to $1.11, compared with $0.88 in the second quarter of the prior year. This improvement in earnings per share resulted from higher net earnings and a lower number of diluted shares outstanding, resulting from the Company’s share repurchases over the last 12 months.

“USANA delivered solid second quarter results, which capped a very impressive first half of 2012,” said Mr. Dave Wentz, Chief Executive Officer. “During the quarter, we continued to see momentum in our business build due, in part, to our successful launch of a new component to our Associate compensation plan. This component, which is known as our Lifetime Matching Bonus, was very well received by our Associates worldwide. Along with the introduction of the Lifetime Matching Bonus, we ran a short-term sales promotion that also contributed to our positive results during the quarter.”

Regional Results

Net sales in the Asia Pacific region increased by 11.0% to $98.4 million, compared with $88.7 million for the second quarter of the prior year. This improvement was due to strong sales growth in Southeast Asia/Pacific and Greater China. This sales growth was driven by an increase in the number of active Associates as well as price increases in certain markets that were implemented in the first quarter. The number of active Associates in the Asia Pacific region increased by 10.1%, due to significant Associate growth in the Philippines, Associate growth in many other Asia Pacific markets, and the addition of Thailand to our Asia Pacific region.

“We are pleased with the continued growth in our Asia Pacific region,” continued Mr. Wentz. “During the quarter, we held a successful grand opening event in Thailand and expect momentum in that market to grow in the second half of the year. Our efforts in Asia Pacific remain focused on our Greater China region, as we continue to lay the foundation for long-term growth by developing Associate leaders there.”

During the second quarter of 2012, net sales in the North America & Europe region increased by 3.6% to $62.5 million, compared with the second quarter of the prior year. This improvement was predominantly due to higher sales in the United States and Mexico and, to a lesser extent, to the opening of France and Belgium. The number of Active Associates in North America & Europe declined modestly compared with the second quarter of 2011.

Mr. Wentz added, “Our strategy to return North America to growth is being successfully executed, and we are encouraged by the momentum we are seeing in this region. In August, we will hold our International Convention in Salt Lake City, where we plan to make several announcements that we believe will facilitate worldwide growth, especially in North America.”

The Company continued its successful track record of generating meaningful levels of cash from operations and ended the quarter with approximately $65.5 million in cash and cash equivalents. Cash generated from operations totaled $21.3 million for the quarter. During the quarter, the Company invested $26.6 million to repurchase 677,000 shares of the Company’s stock.


The Company provided the following updated financial outlook for 2012:

  • Consolidated net sales between $630 million and $640 million, versus the previous outlook of between $610 million and $625 million.
  • Earnings per share between $4.10 and $4.20, versus the previous outlook of between $3.60 and $3.70.

Chief Financial Officer Doug Hekking commented, “Leverage gained on higher sales, better than expected gross margins, and a lower effective tax rate were the main factors that contributed to our strong bottom-line performance this quarter. These same factors, as well as a reduced number of diluted shares outstanding, are the driving forces behind the increase in our earnings per share estimate for the remainder of the current fiscal year. Our strong performance during the first six months of the year has laid the foundation for what we believe will be a solid second half of 2012. As such, we are raising our financial outlook for fiscal 2012.”

Conference Call

USANA will hold a conference call and webcast to discuss this announcement with investors on Wednesday, July 25, 2012 at 11:00 a.m. Eastern Time. Investors may listen to the call by accessing USANA’s website at


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

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)
Quarter Ended Six Months Ended
2-Jul-11 30-Jun-12 2-Jul-11 30-Jun-12
Net sales $ 148,925 $ 160,901 $ 292,491 $ 315,021
Cost of sales   26,208   28,073     51,870   55,290  
Gross profit 122,717 132,828 240,621 259,731
Operating expenses
Associate incentives 67,760 70,901 132,567 138,910
Selling, general and administrative   33,803   36,776     69,673   74,808  
Earnings from operations 21,154 25,151 38,381 46,013
Other income (expense)   -   (222 )   101   (90 )
Earnings before income taxes 21,154 24,929 38,482 45,923
Income taxes   7,298   8,184     13,276   15,427  
NET EARNINGS $ 13,856 $ 16,745   $ 25,206 $ 30,496  
Earnings per share - diluted $ 0.88 $ 1.11   $ 1.58 $ 2.01  
Weighted average shares outstanding - diluted   15,752   15,090     15,964   15,192  
USANA Health Sciences, Inc.

Consolidated Balance Sheets

(In thousands)

As of

As of
31-Dec-11 30-Jun-12


Current Assets
Cash and cash equivalents $ 50,353 $ 65,538
Inventories 36,968 33,805
Other current assets   18,738   24,163  
Total current assets 106,059 123,506
Property and equipment, net 60,754 60,343
Goodwill 17,740 17,675
Intangible assets, net 42,637 41,846
Deferred income taxes 11,033 10,913
Other assets   6,273   6,729  
Total assets $ 244,496 $ 261,012  
Current Liabilities
Accounts payable $ 7,952 $ 6,408
Other current liabilities   51,744   60,341  
Total current liabilities 59,696 66,749
Other long-term liabilities 942 998
Deferred income taxes 9,948 9,638
Stockholders' equity   173,910   183,627  
Total liabilities and stockholders' equity $ 244,496 $ 261,012  

USANA Health Sciences, Inc.
Sales by Region
(In thousands)
  Quarter Ended
2-Jul-11   30-Jun-12


North America / Europe 60,267 40.5 % 62,464 38.8 %
Asia Pacific
Southeast Asia/Pacific 27,225 18.3 % 34,271 21.3 %
Greater China 53,678 36.0 % 56,770 35.3 %
North Asia   7,755 5.2 %   7,396 4.6 %
Asia Pacific Total   88,658 59.5 %   98,437 61.2 %
Total $ 148,925 100.0 % $ 160,901 100.0 %
Active Associates by Region (1)
  As of
2-Jul-11   30-Jun-12


North America / Europe 83,000 37.4 % 82,000 34.9 %
Asia Pacific
Southeast Asia/Pacific 43,000 19.4 % 58,000 24.7 %
Greater China 87,000 39.2 % 87,000 37.0 %
North Asia 9,000 4.0 % 8,000 3.4 %
Asia Pacific Total 139,000 62.6 % 153,000 65.1 %
Total 222,000 100.0 % 235,000 100.0 %
(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)

  As of
2-Jul-11   30-Jun-12


North America / Europe 53,000 77.9 % 52,000 78.8 %
Asia Pacific
Southeast Asia/Pacific 6,000 8.8 % 6,000 9.1 %
Greater China 8,000 11.8 % 7,000 10.6 %
North Asia 1,000 1.5 % 1,000 1.5 %
Asia Pacific Total 15,000 22.1 % 14,000 21.2 %
Total 68,000 100.0 % 66,000 100.0 %
(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.

USANA Health Sciences, Inc.
Investors contact:
Patrique Richards, 801-954-7961
Investor Relations
Media contact:
Dan Macuga, 801-954-7280
Public Relations

Source: USANA Health Sciences, Inc.