Exhibit 99.1


USANA Health Sciences Reports Second Quarter Results

SALT LAKE CITY--(BUSINESS WIRE)--July 26, 2022--USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal second quarter ended July 2, 2022.

Key Financial & Operating Results

  • Second quarter net sales were $264 million as compared with $337 million during the second quarter of the prior year.
  • Second quarter diluted EPS totaled $1.00 versus $1.87 during the second quarter of 2021.
  • Company reiterates fiscal 2022 net sales and diluted EPS outlook of $1.015 billion to $1.065 billion and $3.85 to $4.45, respectively.

Q2 2022 Financial Performance

Consolidated Results

Net Sales

$264 million

  • -21% vs. prior-year quarter
  • -18% constant currency vs. prior-year quarter
  • -$10.9 million YOY FX impact, or -3%
  • Flat sequentially in constant currency

Diluted EPS

$1.00

  • -47% vs. prior-year quarter
  • -13% sequentially
  • Diluted shares of 19.2 million, -6% year-over-year

Active Customers

559,000

  • -14% vs. prior-year quarter
  • +1% sequentially

“As indicated in our preliminary results release on July 6th, we continue to experience COVID-related disruptions in several key markets, including mainland China. This caused participation in sales programs, Active Customer counts, and financial performance to come in lower than anticipated,” said Kevin Guest, Chief Executive Officer and Chairman of the Board. “Although many of these disruptions were outside of our control, and while we faced a tough year-over year comparable due to the timing of a successful sales program in 2021, our second quarter results were not up to our standards. Nevertheless, we remain committed to our business strategy which we believe will deliver sustained, long-term growth in customer counts, net sales, and EPS. Important elements of this strategy include (1) enhancing digital experience for our customers to improve the overall online shopping experience; (2) improving Associate onboarding and training to help drive and sustain customer growth; (3) exploring additional promotions and incentives on a market-specific basis; (4) launching experience centers in mainland China to promote growth in this key market; and (5) pursuing accretive business development opportunities.


"During the quarter, we streamlined our Associate onboarding program and provided Associates with additional tools to help them more efficiently and effectively setup and operate their businesses. Our team also launched improvements to our China shopping app to further improve the online shopping experience in that market. Although it takes time to recapture momentum, we are confident these strategies will deliver long-term growth.”

Q2 2022 Regional Results:

Asia Pacific Region

Net Sales

$217 million

  • -22% vs. prior-year quarter
  • -18% constant currency vs. prior-year quarter
  • +3% constant currency sequentially
  • 82% of consolidated net sales

Active Customers

438,000

  • -15% vs. prior-year quarter
  • +4% sequentially

Asia Pacific Sub-Regions

Greater China

Net Sales

$141 million

  • -15% vs. prior-year quarter
  • -13% constant currency vs. prior-year quarter

Active Customers

278,000

  • -8% vs. prior-year quarter
  • +9% sequentially

North Asia

Net Sales

$29 million

  • -23% vs. prior-year quarter
  • -13% constant currency vs. prior-year quarter

Active Customers

57,000

  • -14% vs. prior-year quarter
  • Flat sequentially

Southeast Asia Pacific

Net Sales

$48 million

  • -37% vs. prior-year quarter
  • -33% constant currency vs. prior-year quarter

Active Customers

103,000

  • -29% vs. prior-year quarter
  • -6% sequentially

Americas and Europe Region

Net Sales

$47 million

  • -19% vs. prior-year quarter
  • -17% constant currency vs. prior-year quarter
  • -13% constant currency sequentially
  • 18% of consolidated net sales

Active Customers

121,000

  • -13% vs. prior-year quarter
  • -7 % sequentially

Balance Sheet and Share Repurchase Activity

The Company ended the quarter with $230 million in cash and cash equivalents and did not repurchase any shares during the quarter. As of July 2, 2022, the Company had approximately $83 million remaining under the share repurchase authorization.

Fiscal 2022 Outlook

The Company is reiterating its net sales and earnings per share outlook for fiscal year 2022, which was updated on July 6, 2022.

Fiscal Year 2022 Outlook

 

Range

Consolidated Net Sales

$1.015 - $1.065 billion

Diluted EPS

$3.85 - $4.45

Doug Hekking, Chief Financial Officer, said, “While we remain optimistic that our strategies will generate future growth, we believe we will continue to face a challenging operating environment in the second half of the year. Moreover, we will do so with a lower-than-anticipated Active Customer base, which will impact our top and bottom-line results for the period. Although COVID-related disruptions and inflationary pressures remain difficult, we remain steadfast in pursing investments to deliver on our business objectives. We will also continue to align our cost structure with sales performance. Despite a challenging operating environment, our debt-free balance sheet remains healthy, and we are on pace to generate meaningful cash flow for the year.”

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 27, 2022 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.


About USANA

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.

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: 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 from geopolitical relations and conflicts, including the Russia-Ukraine conflict; 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, including increasing inflationary pressure around the world and any negative impact on our operating costs, consumer demand and consumer behavior in general; 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


2-Jul-22
3-Jul-21
2-Jul-22
3-Jul-21








 
Net sales

$

264,474

 


$

336,837


$

537,341


$

644,813

Cost of sales

 

49,517

 


 

57,014


 

100,900


 

114,665

Gross profit

 

214,957

 


 

279,823


 

436,441


 

530,148

Operating expenses:







Associate incentives

 

119,204

 


 

153,863


 

238,824


 

288,358

Selling, general and administrative

 

66,387

 


 

72,240


 

135,184


 

143,873

Earnings from operations

 

29,366

 


 

53,720


 

62,433


 

97,917

Other income (expense), net

 

(58

)


 

590


 

162


 

729

Earnings before income taxes

 

29,308

 


 

54,310


 

62,595


 

98,646

Income taxes

 

10,151

 


 

16,076


 

20,969


 

29,791

NET EARNINGS

$

19,157

 


$

38,234


$

41,626


$

68,855









 








 
Earnings per share - diluted

$

1.00

 


$

1.87


$

2.15


$

3.31

Weighted average shares outstanding - diluted

 

19,244

 


 

20,446


 

19,362


 

20,771


USANA Health Sciences, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)




 


As of
As of


2-Jul-22
1-Jan-22
ASSETS



Current Assets



Cash and cash equivalents

$

230,370


$

239,832

Inventories

 

84,171


 

98,318

Prepaid expenses and other current assets

 

27,536


 

26,967

Total current assets

 

342,077


 

365,117





 
Property and equipment, net

 

97,827


 

101,780

Goodwill

 

17,402


 

17,668

Intangible assets, net

 

34,371


 

30,442

Deferred tax assets

 

11,265


 

4,839

Other assets

 

55,017


 

57,894

Total assets

$

557,959


$

577,740





 
LIABILITIES AND STOCKHOLDERS' EQUITY



Current Liabilities



Accounts payable

$

10,175


$

13,508

Other current liabilities

 

123,419


 

147,282

Total current liabilities

 

133,594


 

160,790





 
Deferred tax liabilities

 

5,142


 

7,497

Other long-term liabilities

 

15,542


 

14,329





 
Stockholders' equity

 

403,681


 

395,124

Total liabilities and stockholders' equity

$

557,959


$

577,740


USANA Health Sciences, Inc.
Sales by Region
(In thousands)
(Unaudited)
















 


Quarter Ended









July 2, 2022
July 3, 2021
Change from prior year
Currency impact on sales
% change excluding currency impact
Asia Pacific















Greater China

$

140,775


53.2

%


$

165,416


49.1

%


$

(24,641

)


(14.9

%)


$

(3,062

)


(13.0

%)

Southeast Asia Pacific

 

47,830


18.1

%


 

76,101


22.6

%


 

(28,271

)


(37.1

%)


 

(3,341

)


(32.8

%)

North Asia

 

28,803


10.9

%


 

37,438


11.1

%


 

(8,635

)


(23.1

%)


 

(3,632

)


(13.4

%)

Asia Pacific Total

 

217,408


82.2

%


 

278,955


82.8

%


 

(61,547

)


(22.1

%)


 

(10,035

)


(18.5

%)

















 
Americas and Europe

 

47,066


17.8

%


 

57,882


17.2

%


 

(10,816

)


(18.7

%)


 

(863

)


(17.2

%)



$

264,474


100.0

%


$

336,837


100.0

%


$

(72,363

)


(21.5

%)


$

(10,898

)


(18.2

%)


Active Associates by Region(1)
(Unaudited)








 


As of


July 2, 2022
July 3, 2021
Asia Pacific







Greater China

77,000


32.9

%


88,000


29.3

%

Southeast Asia Pacific

69,000


29.5

%


104,000


34.7

%

North Asia

36,000


15.4

%


42,000


14.0

%

Asia Pacific Total

182,000


77.8

%


234,000


78.0

%









 
Americas and Europe

52,000


22.2

%


66,000


22.0

%



234,000


100.0

%


300,000


100.0

%









 
Active Preferred Customers by Region (2)
(Unaudited)








 


As of


July 2, 2022
July 3, 2021
Asia Pacific







Greater China

201,000


61.8

%


215,000


61.1

%

Southeast Asia Pacific

34,000


10.5

%


40,000


11.4

%

North Asia

21,000


6.5

%


24,000


6.8

%

Asia Pacific Total

256,000


78.8

%


279,000


79.3

%









 
Americas and Europe

69,000


21.2

%


73,000


20.7

%



325,000


100.0

%


352,000


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.

 

Contacts

Investor contact:
Andrew Masuda
Investor Relations
(801) 954-7201
investor.relations@usanainc.com

Media contact:
Dan Macuga
Public Relations
(801) 954-7280