EXHIBIT 99.1 USANA Reports Record Sales and Earnings; Board Approves Two-for-One Stock Split SALT LAKE CITY--(BUSINESS WIRE)--Oct. 14, 2003--USANA Health Sciences Inc. (NASDAQ: USNA) today announced record financial results for the fiscal third quarter and nine months ended Sept. 27, 2003. The company also announced that its board of directors has declared a forward stock split. Net sales for the quarter ended Sept. 27, 2003, were $52.5 million, representing an increase of 51% over the $34.8 million reported in the third quarter last year. Sales were affected positively in the third quarter due to continued growth in the number of active customers, the opening of the South Korea market and a positive impact from stronger foreign currencies of about $2.7 million compared to the third quarter of 2002, accounting for 8% of the growth. Net earnings for the third quarter were $6.1 million, reflecting an increase of 158% over the $2.3 million in net earnings reported in the prior year's third quarter. Earnings per share for the third quarter increased to $0.57 per share, from $0.22 per share in the third quarter of 2002. The increase includes $0.04 per share from a re-estimate of the company's effective tax rate for fiscal year 2003 and $0.02 per share resulting from foreign currency gains. Net sales during the nine months ended Sept. 27, 2003, were $140.5 million, reflecting an increase of 47% compared to $95.5 million for the comparable period of 2002. Net earnings for the first nine months of 2003 were $14 million, up 169% from the $5.2 million in net earnings reported in the comparable period last year. Earnings per share for the nine-month period were $1.31 per share, compared to $0.50 per share for the same period last year. USANA President Dave Wentz said, "The third quarter results are a real tribute to the hardworking Associates and employees who make it happen. Our most mature markets continue to perform remarkably well over prior year results, with sales for the third quarter up 31% in North America and 67% in Australia/New Zealand. We are also pleased with our results in South Korea, our newest market. We have planned a grand opening celebration in South Korea later this month, which we expect will help further the momentum generated during the market launch. Our focus for the future will continue to be directed toward recruiting and retaining Associate leaders in our existing markets, as well as developing Singapore and Mexico for future regional and international growth." The company also announced that its board of directors has approved a two-for-one stock split of its common stock. The stock split will be effected by means of a stock dividend, with one share of USANA common stock to be issued to stockholders of record for every one share of common stock owned. The dividend distribution will double the number of outstanding shares to approximately 19,050,000. The action taken by the board will not affect the number of authorized shares of the company or the par value of the common stock. The company had 9,523,287 shares of common stock outstanding as of Oct. 14, 2003. Dividend shares will be distributed on or about Oct. 30, 2003, to stockholders of record as of Oct. 24, 2003. Wentz commented, "We are pleased to provide an opportunity for more investors to get involved with USANA's growth, while enhancing the liquidity of our shares. Today's announcement is another demonstration of our ongoing commitment to shareholders and our confidence in the long-term growth of USANA." Commenting on the outlook for the fourth quarter and fiscal 2004, Gilbert A. Fuller, chief financial officer, said, "Based on the third quarter operating results, we have increased our guidance for the fourth quarter of 2003. We now expect net sales will approach $57 million, with earnings per share in the range of $0.57 to $0.59 (pre-stock split basis), depending upon the level of spending associated with the opening of operations in Singapore and Mexico. As we look forward to 2004, we anticipate net sales will be in the range of $240 to $250 million and earnings per share will range between $2.45 and $2.55 (pre-stock split basis) for the year." USANA executives will hold a conference call to discuss this announcement and review key line items on the statement of earnings with investors on Oct. 15, 2003, at 9 a.m. EDT. Investors may listen to the call by accessing USANA's Web site at http://www.usanahealthsciences.com and by clicking on the "Investors" icon. USANA develops and manufactures high-quality nutritionals, personal care, and weight management products that are sold directly to Preferred Customers and Associates throughout the United States, Canada, Australia, New Zealand, Hong Kong, Japan, Taiwan, South Korea and the United Kingdom. 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. Actual results could differ materially from those projected in the forward-looking statements, which involve a number of risks and uncertainties, including reliance upon the company's independent Associate network, government regulation of products, manufacturing and marketing, changes in the effective tax rate, the possible continued spread of severe acute respiratory syndrome (SARS) in Asia, and risks associated with international expansion. Those statements include: 1) the expectation that "a grand opening celebration in South Korea later this month ... will help further the momentum generated during the market launch," 2) the statement that, "Our focus for the future will continue to be directed toward recruiting and retaining Associate leaders in our existing markets, as well as developing Singapore and Mexico for future regional and international growth," 3) the statement that, "We now expect net sales will approach $57 million, with earnings per share in the range of $0.57 to $0.59 (pre-stock split basis), depending upon the level of spending associated with the opening of operations in Singapore and Mexico" and 4) that statement, "As we look forward to 2004, we anticipate net sales will be in the range of $240 to $250 million and earnings per share will range between $2.45 and $2.55 (pre-stock split basis) for the year." The contents of this release should be considered in conjunction with the warnings and cautionary statements contained in USANA's most recent filings with the Securities and Exchange Commission on Forms 10-K and 10-Q. USANA Health Sciences Inc. Consolidated Statements of Earnings (in thousands, except per share data) Quarter Ended Nine Months Ended --------------------- ---------------------- 28-Sep-02 27-Sep-03 28-Sep-02 27-Sep-03 ---------- ---------- ---------- ----------- (Unaudited)(Unaudited)(Unaudited)(Unaudited) Net sales $34,787 $52,506 $95,477 $140,527 Cost of sales 8,430 11,364 24,500 31,001 ---------- ---------- ---------- ----------- Gross profit 26,357 41,142 70,977 109,526 Operating expenses Associate incentives 13,429 20,332 36,364 55,091 Selling, general and administrative 9,099 11,926 25,714 32,072 Research and development 260 379 699 1,086 ---------- ---------- ---------- ----------- Earnings from operations 3,569 8,505 8,200 21,277 Other income (expense) (141) 525 (203) 331 ---------- ---------- ---------- ----------- Earnings before income taxes 3,428 9,030 7,997 21,608 Income taxes 1,085 2,974 2,799 7,628 ---------- ---------- ---------- ----------- NET EARNINGS $2,343 $6,056 $5,198 $13,980 ========== ========== ========== =========== Earnings per share - diluted $0.22 $0.57 $0.50 $1.31 ========== ========== ========== =========== Weighted average shares outstanding - diluted 10,608 10,692 10,306 10,647 ========== ========== ========== =========== USANA Health Sciences Inc. Consolidated Balance Sheets (in thousands) As of As of 28-Dec-02 27-Sep-03 ---------- ---------- (Unaudited) ASSETS Cash and cash equivalents $6,686 $10,335 Inventories 9,119 13,042 Other current assets 3,102 3,543 ---------- ---------- Total current assets 18,907 26,920 Property and equipment, net 18,405 19,591 Goodwill - 4,260 Other assets 1,801 2,342 ---------- ---------- Total assets $39,113 $53,113 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $3,428 $ - Capital lease obligations, current 17 - Accounts payable 2,666 5,045 Other current liabilities 8,655 15,455 Line of credit 2,913 - ---------- ---------- Total current liabilities 17,679 20,500 Long-term debt, less current maturities 2,572 - Other long-term liabilities 769 685 Stockholders' equity 18,093 31,928 ---------- ---------- Total liabilities and stockholders' equity $39,113 $53,113 ========== ========== USANA Health Sciences Inc. Sales by Market (in thousands) Quarter Ended ----------------------------------- 28-Sep-02 27-Sep-03 ----------------- ----------------- (Unaudited) (Unaudited) Region United States(a) $18,485 53.1% $23,444 44.7% Canada 7,706 22.2% 10,770 20.5% Australia-New Zealand 4,809 13.8% 8,023 15.3% Hong Kong 2,268 6.5% 2,285 4.4% Japan 1,519 4.4% 1,750 3.3% Taiwan - 0.0% 3,507 6.7% Korea - 0.0% 2,071 3.9% Wasatch - 0.0% 656 1.2% ---------- ------ ---------- ------ $34,787 100.0% $52,506 100.0% ========== ====== ========== ====== Active Associates by Market(b) As of ----------------------------------- 28-Sep-02 27-Sep-03 ----------------- ----------------- (Unaudited) (Unaudited) Region United States(a) 28,000 44.4% 33,000 37.9% Canada 16,000 25.4% 19,000 21.8% Australia-New Zealand 11,000 17.5% 14,000 16.1% Hong Kong 6,000 9.5% 4,000 4.6% Japan 2,000 3.2% 3,000 3.4% Taiwan - 0.0% 9,000 10.3% Korea - 0.0% 5,000 5.7% ---------- ------ ---------- ------ 63,000 100.0% 87,000 100.0% ========== ====== ========== ====== Active Preferred Customers by Market(b) As of ----------------------------------- 28-Sep-02 27-Sep-03 ----------------- ----------------- (Unaudited) (Unaudited) Region United States(a) 26,000 60.5% 30,000 61.2% Canada 12,000 27.9% 14,000 28.6% Australia-New Zealand 4,000 9.3% 4,000 8.2% Hong Kong 1,000 2.3% 1,000 2.0% Japan (c) 0.0% (c) 0.0% Taiwan - 0.0% (c) 0.0% Korea - 0.0% (c) ---------- ------ ---------- ------ 43,000 100.0% 49,000 100.0% ========== ====== ========== ====== (a) For comparability purposes, UK operations and our direct export program to Japan have been included with the U.S. figures. (b) Effective with our Form 10-K filed on March 27, 2003, we changed the methodolgy of how we report the number of customers who have purchased product from USANA. We now count as active customers those Associates and Preferred Customers who have made a purchase in the most recent three-month period. (c) Count of Active Preferred Customers is less than 500. CONTACT: USANA Health Sciences Inc., Salt Lake City Riley Timmer, 801-954-7100 investor.relations@us.usana.com