Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 28, 2020 | May 01, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 28, 2020 | |
Entity File Number | 001-35024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000896264 | |
Entity Registrant Name | USANA HEALTH SCIENCES, INC. | |
Entity Incorporation, State or Country Code | UT | |
Current Fiscal Year End Date | --01-02 | |
Document Fiscal Year Focus | 2020 | |
Entity Tax Identification Number | 87-0500306 | |
Entity Address, Address Line One | 3838 West Parkway Blvd. | |
Entity Address, City or Town | Salt Lake City | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84120 | |
City Area Code | 801 | |
Local Phone Number | 954-7100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | USNA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,014,330 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 28, 2019 |
Current assets | ||
Cash and cash equivalents | $ 194,098 | $ 234,830 |
Inventories | 60,568 | 68,905 |
Prepaid expenses and other current assets | 32,097 | 25,544 |
Total current assets | 286,763 | 329,279 |
Property and equipment, net | 97,246 | 95,233 |
Goodwill | 16,493 | 16,636 |
Intangible assets, net | 29,071 | 29,840 |
Deferred tax assets | 2,756 | 3,090 |
Other assets | 41,421 | 42,856 |
Total assets | 473,750 | 516,934 |
Current liabilities | ||
Accounts payable | 11,824 | 12,525 |
Other current liabilities | 112,680 | 123,573 |
Total current liabilities | 124,504 | 136,098 |
Deferred tax liabilities | 13,730 | 10,282 |
Other long-term liabilities | 17,908 | 18,842 |
Stockholders' equity | ||
Common stock, $0.001 par value; Authorized -- 50,000 shares, issued and outstanding 20,995 as of March 28, 2020 and 21,655 as of December 28, 2019 | 21 | 22 |
Additional paid-in capital | 52,004 | 59,445 |
Retained earnings | 284,682 | 306,146 |
Accumulated other comprehensive income (loss) | (19,099) | (13,901) |
Total stockholders' equity | 317,608 | 351,712 |
Total liabilities and stockholder's equity | $ 473,750 | $ 516,934 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Mar. 28, 2020 | Dec. 28, 2019 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 20,995 | 21,655 |
Common stock, shares outstanding | 20,995 | 21,655 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Condensed Consolidated Statements Of Comprehensive Income [Abstract] | ||
Net sales | $ 266,619 | $ 272,990 |
Cost of sales | 46,059 | 45,901 |
Gross profit | 220,560 | 227,089 |
Operating expenses: | ||
Associate incentives | 116,069 | 122,530 |
Selling, general and administrative | 65,479 | 69,555 |
Total operating expenses | 181,548 | 192,085 |
Earnings from operations | 39,012 | 35,004 |
Other income (expense): | ||
Interest income | 984 | 1,484 |
Interest expense | (21) | (12) |
Other, net | (812) | (182) |
Other income (expense), net | 151 | 1,290 |
Earnings before income taxes | 39,163 | 36,294 |
Income taxes | 12,611 | 12,122 |
Net earnings | $ 26,552 | $ 24,172 |
Earnings per common share | ||
Basic | $ 1.24 | $ 1.03 |
Diluted | $ 1.23 | $ 1.01 |
Weighted average common shares outstanding | ||
Basic | 21,497 | 23,484 |
Diluted | 21,551 | 23,927 |
Comprehensive income: | ||
Net earnings | $ 26,552 | $ 24,172 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment | (6,237) | 4,774 |
Tax benefit (expense) related to foreign currency translation adjustment | 1,039 | (1,294) |
Other comprehensive income (loss), net of tax | (5,198) | 3,480 |
Comprehensive income | $ 21,354 | $ 27,652 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement Of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance, shares at Dec. 29, 2018 | 23,567 | ||||
Balance, value at Dec. 29, 2018 | $ 24 | $ 72,008 | $ 329,501 | $ (10,387) | $ 391,146 |
Net earnings | 24,172 | 24,172 | |||
Other comprehensive income (loss), net of tax | 3,480 | 3,480 | |||
Equity-based compensation expense | 3,832 | 3,832 | |||
Common stock repurchased and retired, value | $ (1) | (5,327) | (24,672) | $ (30,000) | |
Common stock repurchased and retired, shares | (284) | (284) | |||
Common stock issued under equity award plans, shares | 52 | ||||
Tax withholding for net-share settled equity awards | (1,413) | $ (1,413) | |||
Balance, shares at Mar. 30, 2019 | 23,335 | ||||
Balance, value at Mar. 30, 2019 | $ 23 | 69,100 | 329,001 | (6,907) | $ 391,217 |
Balance, shares at Dec. 28, 2019 | 21,655 | 21,655 | |||
Balance, value at Dec. 28, 2019 | $ 22 | 59,445 | 306,146 | (13,901) | $ 351,712 |
Net earnings | 26,552 | 26,552 | |||
Other comprehensive income (loss), net of tax | (5,198) | (5,198) | |||
Equity-based compensation expense | 3,394 | 3,394 | |||
Common stock repurchased and retired, value | $ (1) | (9,012) | (48,016) | $ (57,029) | |
Common stock repurchased and retired, shares | (785) | (785) | |||
Common stock issued under equity award plans, shares | 125 | ||||
Tax withholding for net-share settled equity awards | (1,823) | $ (1,823) | |||
Balance, shares at Mar. 28, 2020 | 20,995 | 20,995 | |||
Balance, value at Mar. 28, 2020 | $ 21 | $ 52,004 | $ 284,682 | $ (19,099) | $ 317,608 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Cash flows from operating activities | ||
Net earnings | $ 26,552 | $ 24,172 |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 3,494 | 3,866 |
Right-of-use asset amortization | 2,255 | 2,023 |
(Gain) loss on sale of property and equipment | 23 | |
Equity-based compensation expense | 3,394 | 3,832 |
Deferred income taxes | 4,611 | 3,048 |
Changes in operating assets and liabilities: | ||
Inventories | 5,153 | (3,630) |
Prepaid expenses and other assets | (4,262) | 1,480 |
Accounts payable | (174) | 1,750 |
Other liabilities | (10,237) | (31,043) |
Net cash provided by (used in) operating activities | 30,786 | 5,521 |
Cash flows from investing activities | ||
Receipts on notes receivable | 85 | 55 |
Payments for net investment hedge | (1,089) | (1,660) |
Maturities of investment securities held-to-maturity | 36,685 | |
Proceeds from sale of property and equipment | 6 | |
Purchases of property and equipment | (7,266) | (2,577) |
Net cash provided by (used in) investing activities | (8,270) | 32,509 |
Cash flows from financing activities | ||
Repurchase of common stock | (57,029) | (30,000) |
Borrowings on line of credit | 5,000 | |
Payments on line of credit | (5,000) | |
Payments related to tax withholding for net-share settled equity awards | (1,823) | (1,413) |
Net cash provided by (used in) financing activities | (58,852) | (31,413) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4,436) | 4,170 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (40,772) | 10,787 |
Cash, cash equivalents, and restricted cash, at beginning of period | 237,688 | 217,234 |
Cash, cash equivalents, and restricted cash at end of period | 196,916 | 228,021 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||
Total cash, cash equivalents, and restricted cash | 196,916 | 228,021 |
Cash paid during the period for: | ||
Interest | 2 | 5 |
Income taxes | 9,694 | 10,163 |
Cash received during the period for: | ||
Income tax refund | 5,095 | |
Non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for lease obligations | 1,914 | 20,286 |
Accrued purchases of property and equipment | $ 608 | $ 251 |
Organization, Consolidation, An
Organization, Consolidation, And Basis Of Presentation | 3 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation, And Basis Of Presentation [Abstract] | |
Organization, Consolidation, And Basis Of Presentation | NOTE A – ORGANIZATION, CONSOLIDATION , AND BASIS OF PRESENTATION USANA Health Sciences, Inc. develops and manufactures high-quality, science-based nutritional and personal care products that are sold internationally through a network marketing system, which is a form of direct selling. The Condensed Consolidated Financial Statements (the “Financial Statements”) include the accounts and operations of USANA Health Sciences, Inc. and its wholly-owned subsidiaries (collectively, the “Company” or “USANA”) in two geographic regions: (1) Asia Pacific, and (2) Americas and Europe. Asia Pacific is further divided into three sub-regions: (i) Greater China, (ii) Southeast Asia Pacific, and (iii) North Asia. All intercompany accounts and transactions have been eliminated in consolidation. The countries included in these regions and sub-regions are as follows: (1) Asia Pacific - (i) Greater China - Hong Kong, Taiwan, and China. The Company’s business in China is conducted by BabyCare Holdings, Ltd., the Company’s wholly-owned subsidiary. (ii) Southeast Asia Pacific – Australia, New Zealand, Singapore, Malaysia, the Philippines, Thailand and Indonesia. (iii) North Asia – Japan and South Korea. (2) Americas and Europe – United States, Canada, Mexico, Colombia, the United Kingdom, France, Germany, Spain, Italy, Romania, Belgium, and the Netherlands. The condensed consolidated balance sheet as of December 28, 2019, derived from audited consolidated financial statements, and the unaudited interim condensed consolidated financial information of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, certain information and footnote disclosures that are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. In the opinion of the Company’s management, the accompanying interim condensed consolidated financial information contains all adjustments, consisting only of normal recurring adjustments that are necessary to state fairly the Company’s financial position as of March 28, 2020 and results of operations for the three months ended March 28, 2020 and March 30, 2019 . The interim Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2019. The results of operations for the three months ended March 28, 2020, are not necessarily indicative of the results that may be expected for the fiscal year ending January 2, 2021. The Company considered the current and expected future economic and market conditions surrounding the global pandemic involving the novel strain of coronavirus known as COVID-19 to assess whether a triggering event had occurred that would result in a potential impairment of goodwill, indefinite-lived intangible assets, and long-lived assets. Based on this assessment, the Company concluded that a triggering event has not occurred which would require further impairment testing to be performed. The Company’s operations were not materially affected by COVID-19 for the three months ended March 28, 2020. While the Company did not incur significant disruptions to its operations during the first quarter of 2020 from COVID-19, it is unable at this time to predict the impact that COVID-19 will have on its business, financial position and operating results in future periods due to numerous uncertainties and is closely monitoring the impact of the pandemic on all aspects of its business. NOTE A – ORGANIZATION, CONSOLIDATION, AND BASIS OF PRESENTATION – CONTINUED Recent Accounting Pronouncements Adopted accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements for fair value measurements. The modifications removed the following disclosure requirements: (i) the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy; (ii) the policy for timing of transfers between levels; and (iii) the valuation processes for Level 3 fair value measurements. This ASU added the following disclosure requirements: (i) the changes in unrealized gains and losses for the period included in other comprehensive income (“OCI”) for recurring Level 3 fair value measurements held at the end of the reporting period; and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses,the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted ASU 2018-13 during the quarter ended March 28, 2020 and the adoption of the standard did not have an impact on its condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The capitalized implementation costs of a hosting arrangement that is a service contract will be expensed over the term of the hosting arrangement. For public business entities, the amendments in this ASU are effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. The amendments can be applied either retrospectively or prospectively to all implementation costs incurred after the adoption date. The Company adopted ASU 2018-15 during the quarter ended March 28, 2020 and the adoption of the standard did not have an impact on its condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the quarter had, or is expected to have, a material impact on the Company’s condensed consolidated financial statements. |
Fair Value Measures
Fair Value Measures | 3 Months Ended |
Mar. 28, 2020 | |
Fair Value Measures [Abstract] | |
Fair Value Measures | NOTE B – FAIR VALUE MEASURES The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable and are used to measure fair value in situations where there is little, if any, market activity for the asset or liability at the measurement date. NOTE B – FAIR VALUE MEASURES - CONTINUED As of the dates indicated, the following financial assets and liabilities were measured at fair value on a recurring basis using the type of inputs shown: Fair Value Measurements Using March 28, Inputs 2020 Level 1 Level 2 Level 3 Money market funds included in cash equivalents $ 139,404 $ 139,404 $ — $ — Net investment hedge included in prepaid expenses and other current assets 1,939 — 1,939 — Foreign currency contracts included in prepaid expenses and other current assets 323 — 323 — $ 141,666 $ 139,404 $ 2,262 $ — Fair Value Measurements Using December 28, Inputs 2019 Level 1 Level 2 Level 3 Money market funds included in cash equivalents $ 180,032 $ 180,032 $ — $ — Foreign currency contracts included in other current liabilities ( 764 ) — ( 764 ) — $ 179,268 $ 180,032 $ ( 764 ) $ — The majority of the Company’s non-financial assets, which include long-lived assets, are not required to be carried at fair value on a recurring basis. However, if an impairment charge is required, a non-financial asset would be written down to fair value. At March 28, 2020 and December 28, 2019, there were no non-financial assets measured at fair value on a non-recurring basis. The Company’s financial instruments include cash equivalents, accounts receivable, restricted cash, and accounts payable. The recorded values of cash equivalents, accounts receivable, restricted cash, and accounts payable approximate their fair values, based on their short-term nature. |
Inventories
Inventories | 3 Months Ended |
Mar. 28, 2020 | |
Inventories [Abstract] | |
Inventories | NOTE C – INVENTORIES Inventories consist of the following : March 28, December 28, 2020 2019 Raw materials $ 14,054 $ 15,879 Work in progress 9,922 12,111 Finished goods 36,592 40,915 $ 60,568 $ 68,905 |
Revenue And Contract Liabilitie
Revenue And Contract Liabilities | 3 Months Ended |
Mar. 28, 2020 | |
Revenue And Contract Liabilities [Abstract] | |
Revenue And Contract Liabilities | NOTE D – REVENUE AND CONTRACT LIABILITIES Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. A majority of the Company’s sales are for products sold at a point in time and shipped to customers, for which control is transferred as goods are delivered to the third party carrier for shipment. The Company receives payment, primarily via credit card, for the sale of products at the time customers place orders and payment is required prior to shipment. Contract liabilities, which are recorded within the “Other current liabilities” line item in the condensed consolidated balance sheets, primarily relate to deferred revenue for product sales for customer payments received in advance of shipment, for outstanding material rights under the initial order program, and for services where control is transferred over time as services are delivered. Other revenue includes fees, which are paid by the customer at the beginning of the service period, for access to online customer service applications and annual account renewal fees for Associates, for which control is transferred over time as services are delivered and are recognized as revenue on a straight-line basis over the term of the respective contracts. Other revenue for the three months ended March 28, 2020 and March 30, 2019 was $ 643 and $ 466 , respectively. Disaggregation of revenue by geographic region and major product line is included in Segment Information in Note I. The following table provides information about contract liabilities from contracts with customers, including significant changes in the contract liabilities balances during the period. March 28, December 28, 2020 2019 Contract liabilities at beginning of period $ 13,852 $ 15,055 Increase due to deferral of revenue at period end 13,361 13,852 Decrease due to beginning contract liabilities recognized as revenue ( 13,132 ) ( 15,055 ) Contract liabilities at end of period $ 14,081 $ 13,852 |
Line Of Credit
Line Of Credit | 3 Months Ended |
Mar. 28, 2020 | |
Line Of Credit [Abstract] | |
Line Of Credit | NOTE E – LINE OF CREDIT The Company has a $ 75,000 line of credit (“Credit Agreement”) with Bank of America (“Bank”). Interest is computed at the Bank’s Prime Rate or a LIBOR-plus “Eurodollar” rate, adjusted by features specified in the Credit Agreement. The collateral for this line of credit is the pledge of the capital stock of certain subsidiaries of the Company, pursuant to a separate pledge agreement with the Bank. On February 19, 2016, the Company entered into an Amended and Restated Credit Agreement with the Bank, which extended the term of the Credit Agreement to April 27, 2021 and increased the Company’s consolidated rolling four-quarter adjusted EBITDA covenant to $ 100,000 or greater and its ratio of consolidated funded debt to adjusted EBITDA of equal to or less than 2.0 to 1.0 at the end of each quarter. On July 15, 2019, the Company entered into a Third Amendment to the Amended and Restated Credit Agreement (the “Third Amendment”). The Third Amendment established a procedure for the Company to request an increase in the line of credit by an amount not to exceed $ 125,000 (up to $ 200,000 in the aggregate). The Company may make a maximum of three such requests in increments of at least $ 25,000 to the Bank. The Bank, at its election, will notify the Company whether or not it agrees to increase the line of credit and, if so, whether by an amount equal to or less than the amount requested by the Company. The line of credit will be automatically reduced to $ 100,000 , as of September 30, 2020. The adjusted EBITDA under the Credit Agreement is modified for certain non-cash expenses. Any existing bank guarantees are considered a reduction of the overall availability of credit and part of the covenant calculation under the Credit Agreement. This provision resulted in a $ 9,234 and $ 8,924 reduction in the available borrowing limit as of March 28, 2020 and December 28, 2019, respectively , due to existing normal course of business guarantees in certain markets. There was no outstanding debt on this line of credit at March 28, 2020 or at December 28, 2019. The Company will be required to pay any balance on this line of credit in full at the time of maturity in April 2021 unless the Credit Agreement is replaced or its terms are renegotiated. Due to the uncertainty surrounding COVID-19 and to ensure the availability of additional liquidity under the Credit Agreement , s ubsequent to March 28, 2020, the Company drew on the line of credit for $60,000. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 28, 2020 | |
Contingencies [Abstract] | |
Contingencies | NOTE F – CONTINGENCIES The Company is involved in various lawsuits, claims, and other legal matters from time to time that arise in the ordinary course of conducting business, including matters involving its products, intellectual property, supplier relationships, distributors, competitor relationships, employees and other matters. The Company records a liability when a particular contingency is probable and estimable. The Company faces contingencies that are reasonably possible to occur; however, they cannot currently be estimated. While complete assurance cannot be given to the outcome of these proceedings, management does not currently believe that any of these matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, liquidity or results of operations. On February 7, 2017, the Company disclosed in a Current Report on Form 8-K filed with the SEC that it was conducting a voluntary internal investigation regarding its BabyCare operations in China. In connection with this investigation, the Company expects to continue to incur costs in conducting the review and investigation, in responding to requests for information in connection with any government investigations and in defending any potential civil or governmental proceedings that may be instituted against it or any of its current or former officers or directors. In 2017, the Company voluntarily contacted the SEC and the United States Department of Justice to advise both agencies that an internal investigation was underway. The Company has provided information to both agencies throughout the internal investigation. The Company’s internal investigation is substantially complete, however the Company continues to cooperate with the SEC and the United States Department of Justice to seek a final resolution of the matter. The Company cannot predict the duration, scope, or result of the investigation. One or more governmental actions could be instituted in respect of the matters that are the subject of the internal investigation, and such actions, if brought, may result in judgments, settlements, fines, penalties, injunctions, cease and desist orders, criminal penalties, or other relief. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 28, 2020 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | NOTE G – DERIVATIVE FINANCIAL INSTRUMENTS The Company’s risk management strategy includes the select use of derivative instruments to reduce the effects of volatility in foreign currency exchange exposure on operating results and cash flows. In accordance with the Company’s risk management policies, the Company does not hold or issue derivative instruments for trading or speculative purposes. The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. When the Company becomes a party to a derivative instrument and intends to apply hedge accounting, the Company formally documents the hedge relationship and the risk management objective for undertaking the hedge, the nature of risk being hedged, and the hedged transaction, which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. The Company also documents how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company periodically uses derivative instruments to hedge the foreign currency exposure of its net investment in foreign subsidiaries into U.S. dollars. Initially, the Company records derivative assets on a gross basis in its condensed consolidated balance sheets. Subsequently the fair value of derivatives is measured for each reporting period. The effective portion of gains and losses attributable to these net investment hedges is recorded to foreign currency translation adjustment (“FCTA”) within accumulated other comprehensive income (loss) (“AOCI”) to offset the change in the carrying value of the net investment being hedged, and will subsequently be reclassified to net earnings in the period in which the investment in the subsidiary is either sold or substantially liquidated. During the three months ended March 28, 2020 and March 30, 2019, the Company entered into a European option designated as a net investment hedge with a notional amount of $ 90,000 and $ 110,000 , respectively. For the three months ended March 28, 2020 and March 30, 2019, the Company had an unrealized gain of $ 850 and an unrealized loss of $ 986 , respectively, recorded to FCTA within OCI. As of March 28, 2020, the Company assessed hedge effectiveness under the forward rate method, determining the hedging instrument was highly effective. |
Common Stock And Earnings Per S
Common Stock And Earnings Per Share | 3 Months Ended |
Mar. 28, 2020 | |
Common Stock And Earnings Per Share [Abstract] | |
Common Stock And Earnings Per Share | NOTE H – COMMON STOCK AND EARNINGS PER SHARE Basic earnings per share (“EPS”) are based on the weighted-average number of shares outstanding for each period. Shares that have been repurchased and retired during the periods specified below have been included in the calculation of the number of weighted-average shares that are outstanding for the calculation of basic EPS based on the time they were outstanding in any period. Diluted EPS are based on shares that are outstanding (computed under basic EPS) and on potentially dilutive shares. Shares that are included in the diluted EPS calculations under the treasury stock method include equity awards that are in-the-money but have not yet been exercised . The following is a reconciliation of the numerator and denominator used to calculate basic EPS and diluted EPS for the periods indicated : Quarter Ended March 28, March 30, 2020 2019 Net earnings available to common shareholders $ 26,552 $ 24,172 Weighted average common shares outstanding - basic 21,497 23,484 Dilutive effect of in-the-money equity awards 54 443 Weighted average common shares outstanding - diluted 21,551 23,927 Earnings per common share from net earnings - basic $ 1.24 $ 1.03 Earnings per common share from net earnings - diluted $ 1.23 $ 1.01 Equity awards for the following shares were not included in the computation of diluted EPS due to the fact that their effect would be anti-dilutive: Quarter Ended March 28, March 30, 2020 2019 815 105 During the three months ended March 28, 2020 and March 30, 2019, the Company repurchased and retired 785 shares and 284 shares for $ 57,029 and $ 30,000 respectively, under the Company’s share repurchase plan. The excess of the repurchase price over par value is allocated between additional paid-in capital and retained earnings on a pro-rata basis. The purchase of shares under this plan reduces the number of shares outstanding in the above calculations. As of March 28, 2020, the remaining authorized repurchase amount under the stock repurchase plan was $ 72,971 . There is no expiration date on the remaining approved repurchase amount and no requirement for future share repurchases. Due to the uncertainty surrounding the impact of the COVID-19 pandemic, in order to preserve liquidity, the Company has temporarily suspended its share repurchase program. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 28, 2020 | |
Segment Information [Abstract] | |
Segment Information | NOTE I – SEGMENT INFORMATION USANA operates as a direct selling company that develops, manufactures, and distributes high-quality nutritional, personal care and skincare products that are sold through a global network marketing system of independent distributors (“Associates”). The Company aggregates its operating segments into one reportable segment as management believes that the Company’s segments exhibit similar long-term financial performance and have similar economic characteristics. Performance for a region or market is evaluated based on sales. No single Associate accounted for 10 % or more of net sales for the periods presented. The table below summarizes the approximate percentage of total product revenue that has been contributed by the Company’s nutritionals, foods, and personal care and skincare products for the periods indicated. Quarter Ended March 28, March 30, 2020 2019 USANA ® Nutritionals 86 % 84 % USANA Foods 8 % 8 % Personal care and Skincare 5 % 7 % All Other 1 % 1 % Selected Financial Information Financial information by geographic region is presented for the periods indicated below: Quarter Ended March 28, March 30, 2020 2019 Net Sales to External Customers Asia Pacific Greater China $ 131,432 $ 144,153 Southeast Asia Pacific 56,922 54,515 North Asia 27,251 22,228 Asia Pacific Total 215,605 220,896 Americas and Europe 51,014 52,094 Consolidated Total $ 266,619 $ 272,990 The following table provides further information on markets representing 10% or more of consolidated net sales and long- lived assets, respectively: Quarter Ended March 28, March 30, 2020 2019 Net sales: China $ 115,478 $ 127,372 As of March 28, December 28, 2020 2019 Long-lived assets: China $ 88,131 $ 90,886 United States $ 59,345 $ 54,809 |
Organization, Consolidation, _2
Organization, Consolidation, And Basis Of Presentation (Policy) | 3 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation, And Basis Of Presentation [Abstract] | |
Recent Accounting Pronouncements | NOTE A – ORGANIZATION, CONSOLIDATION, AND BASIS OF PRESENTATION – CONTINUED Recent Accounting Pronouncements Adopted accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements for fair value measurements. The modifications removed the following disclosure requirements: (i) the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy; (ii) the policy for timing of transfers between levels; and (iii) the valuation processes for Level 3 fair value measurements. This ASU added the following disclosure requirements: (i) the changes in unrealized gains and losses for the period included in other comprehensive income (“OCI”) for recurring Level 3 fair value measurements held at the end of the reporting period; and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses,the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted ASU 2018-13 during the quarter ended March 28, 2020 and the adoption of the standard did not have an impact on its condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The capitalized implementation costs of a hosting arrangement that is a service contract will be expensed over the term of the hosting arrangement. For public business entities, the amendments in this ASU are effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. The amendments can be applied either retrospectively or prospectively to all implementation costs incurred after the adoption date. The Company adopted ASU 2018-15 during the quarter ended March 28, 2020 and the adoption of the standard did not have an impact on its condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the quarter had, or is expected to have, a material impact on the Company’s condensed consolidated financial statements. |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Fair Value Measures [Abstract] | |
Schedule Of Assets And Liabilities Measured At Fair Value | Fair Value Measurements Using March 28, Inputs 2020 Level 1 Level 2 Level 3 Money market funds included in cash equivalents $ 139,404 $ 139,404 $ — $ — Net investment hedge included in prepaid expenses and other current assets 1,939 — 1,939 — Foreign currency contracts included in prepaid expenses and other current assets 323 — 323 — $ 141,666 $ 139,404 $ 2,262 $ — Fair Value Measurements Using December 28, Inputs 2019 Level 1 Level 2 Level 3 Money market funds included in cash equivalents $ 180,032 $ 180,032 $ — $ — Foreign currency contracts included in other current liabilities ( 764 ) — ( 764 ) — $ 179,268 $ 180,032 $ ( 764 ) $ — |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Inventories [Abstract] | |
Schedule Of Inventories | March 28, December 28, 2020 2019 Raw materials $ 14,054 $ 15,879 Work in progress 9,922 12,111 Finished goods 36,592 40,915 $ 60,568 $ 68,905 |
Revenue And Contract Liabilit_2
Revenue And Contract Liabilities (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Revenue And Contract Liabilities [Abstract] | |
Schedule Of Contract Liabilities From Contract With Customers | March 28, December 28, 2020 2019 Contract liabilities at beginning of period $ 13,852 $ 15,055 Increase due to deferral of revenue at period end 13,361 13,852 Decrease due to beginning contract liabilities recognized as revenue ( 13,132 ) ( 15,055 ) Contract liabilities at end of period $ 14,081 $ 13,852 |
Common Stock And Earnings Per_2
Common Stock And Earnings Per Share (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Common Stock And Earnings Per Share [Abstract] | |
Schedule Of Earnings Per Share | Quarter Ended March 28, March 30, 2020 2019 Net earnings available to common shareholders $ 26,552 $ 24,172 Weighted average common shares outstanding - basic 21,497 23,484 Dilutive effect of in-the-money equity awards 54 443 Weighted average common shares outstanding - diluted 21,551 23,927 Earnings per common share from net earnings - basic $ 1.24 $ 1.03 Earnings per common share from net earnings - diluted $ 1.23 $ 1.01 |
Schedule Of Shares Not Included In The Computation Of Diluted EPS | Quarter Ended March 28, March 30, 2020 2019 815 105 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Segment Information [Abstract] | |
Schedule Of Revenue Percentage By Product | Quarter Ended March 28, March 30, 2020 2019 USANA ® Nutritionals 86 % 84 % USANA Foods 8 % 8 % Personal care and Skincare 5 % 7 % All Other 1 % 1 % |
Schedule Of Revenues From External Customers By Geographical Areas | Quarter Ended March 28, March 30, 2020 2019 Net Sales to External Customers Asia Pacific Greater China $ 131,432 $ 144,153 Southeast Asia Pacific 56,922 54,515 North Asia 27,251 22,228 Asia Pacific Total 215,605 220,896 Americas and Europe 51,014 52,094 Consolidated Total $ 266,619 $ 272,990 |
Consolidated Net Sales And Long Lived Assets | Quarter Ended March 28, March 30, 2020 2019 Net sales: China $ 115,478 $ 127,372 As of March 28, December 28, 2020 2019 Long-lived assets: China $ 88,131 $ 90,886 United States $ 59,345 $ 54,809 |
Organization, Consolidation, _3
Organization, Consolidation, And Basis Of Presentation (Narrative) (Details) | 3 Months Ended |
Mar. 28, 2020item | |
Organization, Consolidation, And Basis Of Presentation [Abstract] | |
Geographic regions | 2 |
Sub-geographical regions | 3 |
Fair Value Measures (Narrative)
Fair Value Measures (Narrative) (Details) - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
Fair Value Measures [Abstract] | ||
Non-financial assets | $ 0 | $ 0 |
Fair Value Measures (Schedule O
Fair Value Measures (Schedule Of Assets And Liabilities Measured At Fair Value) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 28, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net investment hedge included in prepaid expenses and other current assets | $ 1,939 | |
Foreign currency contracts included in prepaid expenses and other current assets | 323 | |
Foreign currency contracts included in other current liabilities | $ (764) | |
Total financial assets and liabilities | 141,666 | 179,268 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets and liabilities | 139,404 | 180,032 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net investment hedge included in prepaid expenses and other current assets | 1,939 | |
Foreign currency contracts included in prepaid expenses and other current assets | 323 | |
Foreign currency contracts included in other current liabilities | (764) | |
Total financial assets and liabilities | 2,262 | (764) |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 139,404 | 180,032 |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 139,404 | $ 180,032 |
Inventories (Schedule Of Invent
Inventories (Schedule Of Inventories) (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 28, 2019 |
Inventories [Abstract] | ||
Raw materials | $ 14,054 | $ 15,879 |
Work in progress | 9,922 | 12,111 |
Finished goods | 36,592 | 40,915 |
Inventories | $ 60,568 | $ 68,905 |
Revenue And Contract Liabilit_3
Revenue And Contract Liabilities (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Revenue And Contract Liabilities [Abstract] | ||
Other revenue | $ 643 | $ 466 |
Revenue And Contract Liabilit_4
Revenue And Contract Liabilities (Schedule Of Contract Liabilities From Contract With Customers) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 28, 2020 | Dec. 28, 2019 | |
Revenue And Contract Liabilities [Abstract] | ||
Contract liabilities at beginning of period | $ 13,852 | $ 15,055 |
Increase due to deferral of revenue at period end | 13,361 | 13,852 |
Decrease due to beginning contract liabilities recognized as revenue | (13,132) | (15,055) |
Contract liabilities at end of period | $ 14,081 | $ 13,852 |
Line Of Credit (Narrative) (Det
Line Of Credit (Narrative) (Details) | Sep. 30, 2020USD ($) | Jul. 15, 2019USD ($)item | Mar. 28, 2020USD ($) | Dec. 28, 2019USD ($) | Feb. 19, 2016USD ($) |
Line of Credit Facility [Line Items] | |||||
Credit facility | $ 75,000,000 | ||||
Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Increased (decreased) line of credit | 9,234,000 | $ 8,924,000 | |||
Outstanding debt | $ 0 | $ 0 | |||
Maturity date | Apr. 27, 2021 | ||||
Amended And Restated Credit Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Adjusted EBITDA covenant | $ 100,000,000 | ||||
Third Amendment [Member] | Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Increased (decreased) line of credit | $ 125,000,000 | ||||
Credit facility | $ 200,000,000 | ||||
Third Amendment [Member] | Maximum [Member] | Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Number of increments | item | 3 | ||||
Third Amendment [Member] | Minimum [Member] | Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity available | $ 25,000,000 | ||||
Third Amendment [Member] | Scenario, Forecast [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Increased (decreased) line of credit | $ 100,000,000 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Derivative Financial Instruments [Abstract] | ||
Notional amount | $ 90,000 | $ 110,000 |
Unrealized gain (loss) | $ 850 | $ (986) |
Common Stock And Earnings Per_3
Common Stock And Earnings Per Share (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Common Stock And Earnings Per Share [Abstract] | ||
Shares repurchased and retired | 785 | 284 |
Repurchase of common stock | $ 57,029 | $ 30,000 |
Remaining approved repurchase amount | $ 72,971 |
Common Stock And Earnings Per_4
Common Stock And Earnings Per Share (Schedule Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Common Stock And Earnings Per Share [Abstract] | ||
Net earnings available to common shareholders | $ 26,552 | $ 24,172 |
Weighted average common shares outstanding - basic | 21,497 | 23,484 |
Dilutive effect of in-the-money equity awards | 54 | 443 |
Weighted average common shares outstanding - diluted | 21,551 | 23,927 |
Earnings per common share from net earnings - basic | $ 1.24 | $ 1.03 |
Earnings per common share from net earnings - diluted | $ 1.23 | $ 1.01 |
Common Stock And Earnings Per_5
Common Stock And Earnings Per Share (Schedule Of Shares Not Included In The Computation Of Diluted EPS) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Common Stock And Earnings Per Share [Abstract] | ||
Equity awards for the following shares were not included in the computation of diluted EPS due to the fact that their effect would be anti-dilutive: | 815 | 105 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended |
Mar. 28, 2020segmentitem | |
Segment Information [Abstract] | |
Number of reportable segments | segment | 1 |
Percentage of revenue from major customers, maximum | 10.00% |
Geographic regions | item | 2 |
Segment Information (Schedule O
Segment Information (Schedule Of Revenue Percentage By Product) (Details) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
USANA Nutritionals [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage of product revenue | 86.00% | 84.00% |
USANA Foods [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage of product revenue | 8.00% | 8.00% |
Personal Care and Skincare [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage of product revenue | 5.00% | 7.00% |
All Other [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage of product revenue | 1.00% | 1.00% |
Segment Information (Schedule_2
Segment Information (Schedule Of Revenues From External Customers By Geographical Areas) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net Sales to External Customers | $ 266,619 | $ 272,990 |
Greater China [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net Sales to External Customers | 131,432 | 144,153 |
Southeast Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net Sales to External Customers | 56,922 | 54,515 |
North Asia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net Sales to External Customers | 27,251 | 22,228 |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net Sales to External Customers | 215,605 | 220,896 |
Americas And Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net Sales to External Customers | $ 51,014 | $ 52,094 |
Segment Information (Consolidat
Segment Information (Consolidated Net Sales And Long Lived Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Dec. 28, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 266,619 | $ 272,990 | |
China [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 115,478 | $ 127,372 | |
Long-lived assets | 88,131 | $ 90,886 | |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 59,345 | $ 54,809 |
Uncategorized Items - usna-2020
Label | Element | Value |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 2,980,000 |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 2,818,000 |