USANA Health Sciences Reports First Quarter Results

USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal first quarter ended April 3, 2021.

Key Financial & Operating Highlights

• First quarter net sales increased 15.5% year-over-year to $308.0 million.
• First quarter diluted EPS increased 17.9% year-over-year to $1.45.
• Repurchased 721,000 shares for $69.5 million during the quarter.
• Raises 2021 net sales and diluted EPS outlook.

Q1 2021 Financial Performance

“We had an excellent start to the year largely due to continued strong consumer demand for our high-quality products,” said Kevin Guest, Chief Executive Officer and Chairman of the Board. “Our strong top-line performance was driven by double-digit year-over-year sales growth in each of our regions, and we expect the execution of our 2021 global growth strategy will continue to generate growth in the remainder of the year.”

Q1 2021 Regional Results:

“We successfully launched our new Active Nutrition line in late March and have received positive feedback on these new products from our customers,” continued Mr. Guest. “The Active Nutrition line promotes healthy weight management, digestive health, energy and hydration. While the initial launch was limited to the United States, Canada, Mexico, Australia, and New Zealand, we will roll these products out to additional markets throughout the year. During the quarter, we also continued to advance our digital experience strategy with an emphasis on improving our overall shopping experience, particularly in China. Enhancements will allow consumers to easily interact with USANA while sharing their experiences with others.”

Balance Sheet and Share Repurchase Activity

The Company ended the quarter with $257 million in cash and cash equivalents and no debt. As of April 3, 2021, the Company had 21.1 million fully diluted shares outstanding. During the quarter, the Company repurchased 721,000 shares totaling $69.5 million. As of April 3, 2021, there was approximately $80.5 million remaining under the existing share repurchase authorization.

Fiscal 2021 Outlook

The Company is increasing its consolidated net sales and earnings per share outlook for fiscal year 2021 as follows:

The Company maintains a 52/53-week fiscal year. Fiscal 2020 was a 53-week year and included one additional week of sales compared to Fiscal 2021.

Doug Hekking, Chief Financial Officer, said, “First quarter operating results were better than internal expectations and were driven by continued momentum in our underlying business around the world. As expected, changes in currency exchange rates favorably contributed to our quarterly performance.

“Given our first quarter results, we are increasing our outlook for 2021, which now reflects top-line growth between 9.3% and 12.8%. Notably, we expect sales to accelerate during the second quarter, due largely to a short-term sales program we are offering around the world during the quarter. We offered a similar short-term sales program during the third quarter of 2020, which was successful and received a positive response from our Associates around the world. Following the conclusion of this program, we expect to see year-over-year sales growth, albeit at a decreased growth rate from the second quarter of this year. Our updated 2021 outlook continues to reflect an operating margin between 14.8% and 15.2%, continued favorable foreign currency environment, and an increase in spending in the back half of the year related to travel and event-related costs. We continue to project an effective tax rate of 31% for the year and a diluted share count of 20.7 million, which reflects share repurchases made during the first quarter. Overall, we had a solid start to the year and I believe we are positioned to deliver record results in 2021.”

Management Commentary Document and Conference Call

For more information on the Company’s operating results, please see the “Management Commentary, Results and Outlook” document, which has been posted on the Company’s website (http://ir.usana.com) under the “Investor Relations” section of the site. USANA will hold a conference call and webcast to discuss today’s announcement with investors on Wednesday, April 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, before moving directly into questions and answers.

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 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.

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