USANA Health Sciences, Inc. (NYSE: USNA) today announced
financial results for its fiscal fourth quarter and full year ended
December 31, 2022.
Key Financial & Operating Results
- Fourth quarter net sales were $228 million versus $267 million
during the prior-year period.
- Fourth quarter diluted EPS was $0.66 as compared with $1.03
during Q4 2021.
- Fiscal year 2022 net sales were $999 million as compared with
$1,186 million during fiscal year 2021.
- Fiscal year 2022 diluted EPS totaled $3.59 versus $5.73 during
fiscal year 2021.
- Fiscal year 2022 operating cash flow totaled $104 million.
- Company reiterates fiscal year 2023 net sales and diluted EPS
outlook of $850 million to $950 million and $2.35 to $3.30,
respectively.
Fiscal Year 2022 Financial Performance
Consolidated Results
Net Sales
$999 million
- -16% vs. prior year
- -12% constant currency vs. prior year
- -$50 million YOY FX impact, or -4%
Diluted EPS
$3.59
- -37% vs. prior year
- Diluted shares of 19.3 million, -5% year-over-year
Active Customers
490,000
“Our fourth quarter and full year results were largely in line
with our preliminary results announced on January 5, 2023,” said
Kevin Guest, Chief Executive Officer and Chairman of the Board.
“During the fourth quarter, total Active Customer counts stabilized
in several key markets and increased 3% sequentially. In addition,
sales and customer activity in mainland China increased during the
final two weeks of the year following the Chinese government’s
unanticipated shift in COVID policy. This increase in sales and
customer activity was due largely to increased demand for several
of our health products in China.”
“While 2022 presented a challenging operating environment for
both USANA and our industry, we remained focused on executing our
long-term growth strategy. In 2022, we made progress in several
areas that position USANA for future growth. These areas include
digital commerce initiatives to support our business, new market
expansion, the launch of our Affiliate program in select markets,
and the completion of two acquisitions. These activities further
our efforts to differentiate and diversify our business while
contributing to shareholder returns.”
Q4 2022 Financial Performance
Consolidated Results
Net Sales
$228 million
- -15% vs. prior-year quarter
- -7% constant currency vs. prior-year quarter
- -$21 million YOY FX impact, or -8%
- Flat sequentially in constant currency
Diluted EPS
$0.66
- -36% vs. prior-year quarter
- -15% sequentially
- Diluted shares of 19.3 million, -2% year-over-year
Active Customers
490,000
- -13% vs. prior-year quarter
- +3% sequentially
Q4 2022 Regional Results:
Asia Pacific Region
Net Sales
$183 million
- -14% vs. prior-year quarter
- -4% constant currency vs. prior-year quarter
- +3% constant currency sequentially
- 80% of consolidated net sales
Active Customers
384,000
- -10% vs. prior-year quarter
- +6% sequentially
Asia Pacific
Sub-Regions
Greater China
Net Sales
$118 million
- -6% vs. prior-year quarter
- +4% constant currency vs. prior-year quarter
Active Customers
244,000
- -4% vs. prior-year quarter
- +15% sequentially
North Asia
Net Sales
$25 million
- -16% vs. prior-year quarter
- -3% constant currency vs. prior-year quarter
Active Customers
53,000
- -9% vs. prior-year quarter
- -2% sequentially
Southeast Asia Pacific
Net Sales
$41 million
- -29% vs. prior-year quarter
- -22% constant currency vs. prior-year quarter
Active Customers
87,000
- -24% vs. prior-year quarter
- -8% sequentially
Americas and Europe
Region
Net Sales
$45 million
- -19% vs. prior-year quarter
- -18% constant currency vs. prior-year quarter
- -11% constant currency sequentially
- 20% of consolidated net sales
Active Customers
106,000
- -20% vs. prior-year quarter
- -5 % sequentially
Balance Sheet and Share Repurchase Activity
The Company generated $104 million of operating cash flow during
fiscal 2022, ended the year with $288 million in cash and cash
equivalents, and remained debt-free. The Company did not repurchase
shares during the quarter and, as of December 31, 2022, had
approximately $83 million remaining under the current share
repurchase authorization. For the full year, the Company
repurchased 288 thousand shares for a total investment of $25.4
million.
Fiscal Year 2023 Outlook
Mr. Guest added, “Our strategies during 2023 are focused on
increasing the number of Active Customers in our business. These
efforts include a return to live sales meetings and events where
possible, new market expansion, new incentive opportunities for our
salesforce, and pursuing additional acquisition opportunities.
Additionally, we continue to execute our long-term strategy with a
focus on digital commerce, product development, and improvements to
ensure the best overall customer experience.”
The Company is reiterating its net sales and earnings per share
outlook for fiscal year 2023 provided on January 5, 2023, as
follows:
Fiscal Year 2023
Outlook
Range
Consolidated Net Sales
$850 - $950 million
Diluted EPS
$2.35 - $3.30
“While we have seen increased sales activity and customer demand
in China for certain of our health products following that
country’s change in COVID policy, it remains difficult to forecast
the duration of the market response as well as the subsequent
normalized level of business in this key market during fiscal 2023.
Therefore, we are reiterating our full-year outlook which
incorporates wider-than-typical ranges for net sales and diluted
EPS,” said Doug Hekking, Chief Financial Officer.
“Moreover, we are entering fiscal year 2023 with an Active
Customer base that is 13% lower than it was at the beginning of
2022. Our customer growth efforts are focused on generating
sequential quarter customer growth from this base. Also of note: we
continue to experience increased costs due to inflationary
pressures, and we project increased spending related to several
growth initiatives plus a return to in-person sales events and
incentive trips.”
Management Commentary Document and Conference Call
For further 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, February 8, 2023 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 COVID-19 pandemic
(“COVID-19”) to our business, operations and financial results; 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; compliance with data privacy and security laws
and regulations in our markets around the world; 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 Twelve Months Ended
31-Dec-22
1-Jan-22
31-Dec-22
1-Jan-22
Net sales
$
227,960
$
267,299
$
998,601
$
1,186,464
Cost of sales
46,430
52,518
193,890
217,898
Gross profit
181,530
214,781
804,711
968,566
Operating expenses: Associate incentives
97,879
114,687
434,793
519,267
Selling, general and administrative
61,100
68,589
262,304
279,107
Earnings from operations
22,551
31,505
107,614
170,192
Other income (expense), net
251
141
1,007
450
Earnings before income taxes
22,802
31,646
108,621
170,642
Income taxes
10,007
11,326
39,271
54,137
NET EARNINGS
$
12,795
$
20,320
$
69,350
$
116,505
Earnings per share - diluted
$
0.66
$
1.03
$
3.59
$
5.73
Weighted average shares outstanding - diluted
19,263
19,673
19,310
20,343
USANA Health Sciences, Inc. Consolidated Balance
Sheets (In thousands) (Unaudited)
As of As
of 31-Dec-22 1-Jan-22 ASSETS Current
Assets Cash and cash equivalents
$
288,420
$
239,832
Inventories
67,089
98,318
Prepaid expenses and other current assets
28,873
26,967
Total current assets
384,382
365,117
Property and equipment, net
97,773
101,780
Goodwill
17,368
17,668
Intangible assets, net
32,432
30,442
Deferred tax assets
9,799
4,839
Other assets
54,795
57,894
Total assets
$
596,549
$
577,740
LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities Accounts payable
$
11,049
$
13,508
Other current liabilities
132,784
147,282
Total current liabilities
143,833
160,790
Deferred tax liabilities
4,071
7,497
Other long-term liabilities
14,173
14,329
Stockholders' equity
434,472
395,124
Total liabilities and stockholders' equity
$
596,549
$
577,740
USANA Health Sciences, Inc. Sales by Region (In
thousands) (Unaudited)
Quarter Ended December 31,
2022 January 1, 2022 Change from prior year
Currencyimpact onsales %
changeexcludingcurrencyimpact Asia Pacific Greater China
$
118,290
51.9
%
$
125,840
47.1
%
$
(7,550
)
(6.0
%)
$
(12,161
)
3.7
%
Southeast Asia Pacific
40,598
17.8
%
56,984
21.3
%
(16,386
)
(28.8
%)
(4,088
)
(21.6
%)
North Asia
24,543
10.8
%
29,249
10.9
%
(4,706
)
(16.1
%)
(3,725
)
(3.4
%)
Asia Pacific Total
183,431
80.5
%
212,073
79.3
%
(28,642
)
(13.5
%)
(19,974
)
(4.1
%)
Americas and Europe
44,529
19.5
%
55,226
20.7
%
(10,697
)
(19.4
%)
(1,002
)
(17.6
%)
$
227,960
100.0
%
$
267,299
100.0
%
$
(39,339
)
(14.7
%)
$
(20,976
)
(6.9
%)
Active Associates by Region(1) (Unaudited)
As
of December 31, 2022 January 1, 2022 Asia Pacific
Greater China
74,000
34.1
%
81,000
31.9
%
Southeast Asia Pacific
62,000
28.6
%
78,000
30.7
%
North Asia
34,000
15.6
%
37,000
14.6
%
Asia Pacific Total
170,000
78.3
%
196,000
77.2
%
Americas and Europe
47,000
21.7
%
58,000
22.8
%
217,000
100.0
%
254,000
100.0
%
Active Preferred Customers by Region (2) (Unaudited)
As of December 31, 2022 January 1, 2022 Asia
Pacific Greater China
170,000
62.3
%
174,000
56.8
%
Southeast Asia Pacific
25,000
9.1
%
37,000
12.1
%
North Asia
19,000
7.0
%
21,000
6.9
%
Asia Pacific Total
214,000
78.4
%
232,000
75.8
%
Americas and Europe
59,000
21.6
%
74,000
24.2
%
273,000
100.0
%
306,000
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230207006046/en/
Investor contact: Andrew Masuda Investor Relations (801)
954-7201 investor.relations@usanainc.com
Media contact: Dan Macuga Public Relations (801) 954-7280
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