Exhibit 99.1
USANA Reports Record Fourth Quarter Financial Results; Net Sales up
55%; Net Earnings up 107%
SALT LAKE CITY--(BUSINESS WIRE)--Feb. 3, 2004--USANA Health
Sciences Inc. (Nasdaq: USNA) today announced record financial results
for the fiscal fourth quarter and year ended Jan. 3, 2004.
Net sales for the quarter ended Jan. 3, 2004 were $59.5 million,
up 55% from the $38.3 million reported for the fourth quarter of 2002.
The total number of active Associates increased by 22,000 to
approximately 88,000 from the prior year fourth quarter and was the
key driver of this revenue growth. Net sales were affected positively
in the fourth quarter by stronger foreign currencies relative to the
U.S. dollar. Excluding the impact of foreign currency, sales growth
would still have been 44%.
Net earnings for the fourth quarter were $6.8 million, up 107%
from $3.3 million in net earnings reported for the prior year's fourth
quarter. Earnings per share for the fourth quarter increased to $0.32
per share, from $0.16 per share for the fourth quarter of 2002. This
increase includes $0.02 per share from a favorable adjustment of the
company's effective tax rate for the fourth quarter of 2003.
Due to the company's accounting cycle, fiscal 2003 comprised 53
weeks rather than the typical 52 weeks. Therefore, the fourth quarter
of 2003 was a 14-week period, compared to a typical 13-week quarter.
As a result, net sales for the fourth quarter were affected positively
by nearly $4 million, and earnings per share for the quarter improved
by approximately $0.02.
For the fiscal year ended Jan. 3, 2004, net sales were $200
million, an increase of 50%, compared with $133.8 million reported for
the full fiscal year 2002. Net earnings for fiscal year 2003 were
$20.8 million, up 145% from the $8.5 million in net earnings reported
for the prior year. Earnings per share for 2003 were $0.98 per share,
compared with $0.41 per share for the full fiscal year 2002.
"The growth in our sales during the fourth quarter is primarily
the result of the dedication of our Associates in selling our
advanced, scientifically based nutritional products," said Dave Wentz,
president of USANA. "We have continued to invest in our Associates and
are committed to providing them with the resources necessary to be
successful. Our active Associate base for the fourth quarter of 2003
was 33% higher than our base for the fourth quarter of 2002. We opened
our operations in Singapore in November, where more than 1,000 new
Associates attended our ribbon-cutting ceremony. We believe that
Singapore will be a strategic market for USANA, as we plan for future
expansion in the Asia Pacific region."
Commenting on the fourth quarter and year-end results, Gilbert A.
Fuller, chief financial officer, said, "This was another record
quarter for both sales and earnings, further demonstrating the
effectiveness of the direct selling channel for distributing our
high-quality, scientifically developed products. Even absent the extra
week this quarter, our sales still would have increased to
approximately $56 million, a 46% increase compared with the fourth
quarter of 2002.
"Building on the continued strength of our operating performance
in each of our markets, we now expect that sales for the first quarter
of 2004 will approach $60 million, with earnings per share of
approximately $0.31, depending upon the timing and success of our
opening in Mexico. For the full year 2004, we believe that sales will
be in the range of $245 to $255 million and that earnings per share
will be between $1.35 and $1.40, based on an estimated 34% tax rate.
"We continued to improve our balance sheet during the fourth
quarter and ended the year with no debt and $19 million in cash and
cash equivalents," Fuller concluded.
USANA will hold a conference call and webcast to discuss this
announcement with investors on Wednesday, Feb. 4, 2004 at 9 a.m. EST.
Investors may listen to the call by accessing USANA's Web site at
http://www.usanahealthsciences.com and by clicking on the "Investors"
icon.
About USANA
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,
Singapore and the United Kingdom. More information on USANA can be
found at http://www.usanahealthsciences.com.
Non-GAAP Information
This press release also includes the following non-GAAP
information that the company believes to be material to an
understanding of its operating results: (1) the impact of foreign
currency translation on net sales, (2) the effect of favorable tax
treatment on earnings, (3) the effective tax rate for the fourth
quarter of 2003 of the company and (4) customer count data.
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. 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) and "bird flu" in Asia, and risks associated with
international expansion. Those statements include: (1) " ... we now
expect that sales for the first quarter of 2004 will approach $60
million, with earnings per share to be approximately $0.31, depending
upon the timing and success of our opening in Mexico." (2) "For the
full year 2004, we believe that sales will be in the range of $245 to
$255 million and that earnings per share will be between $1.35 and
$1.40, based on an estimated 34% tax rate." 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 Year Ended
--------------------- ----------------------
28-Dec-02 3-Jan-04 28-Dec-02 3-Jan-04
---------- ---------- ---------- -----------
(Unaudited)(Unaudited) (Unaudited)
Net sales $38,299 $59,486 $133,776 $200,013
Cost of sales 8,892 13,421 33,392 44,422
---------- ---------- ---------- -----------
Gross profit 29,407 46,065 100,384 155,591
Operating expenses
Associate incentives 14,810 23,584 51,174 78,675
Selling, general and
administrative 9,668 12,341 35,382 44,413
Research and
development 336 298 1,035 1,384
---------- ---------- ---------- -----------
Earnings from
operations 4,593 9,842 12,793 31,119
Other income (expense) (18) (139) (221) 192
---------- ---------- ---------- -----------
Earnings before
income taxes 4,575 9,703 12,572 31,311
Income taxes 1,270 2,866 4,069 10,494
---------- ---------- ---------- -----------
NET EARNINGS $3,305 $6,837 $8,503 $20,817
========== ========== ========== ===========
Earnings per share -
diluted $0.16 $0.32 $0.41 $0.98
========== ========== ========== ===========
Weighted average shares
outstanding - diluted 20,749 21,389 20,647 21,319
========== ========== ========== ===========
USANA Health Sciences Inc.
Consolidated Balance Sheets
(in thousands)
As of As of
28-Dec-02 3-Jan-04
---------- ----------
(Unaudited)
ASSETS
Cash and cash equivalents $6,686 $18,965
Inventories 9,119 14,069
Other current assets 3,102 5,215
---------- ----------
Total current assets 18,907 38,249
Property and equipment, net 18,405 20,195
Goodwill 4,267
Other assets 1,801 2,416
---------- ----------
Total assets $39,113 $65,127
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of
long-term debt $3,428 $-
Capital lease obligations,
current 17 -
Accounts payable 2,666 5,215
Other current liabilities 8,655 14,704
Line of credit 2,913 -
---------- ----------
Total current liabilities 17,679 19,919
Long-term debt, less current
maturities 2,572 -
Other long-term liabilities 769 837
Stockholders' equity 18,093 44,371
---------- ----------
Total liabilities and stockholders'
equity $39,113 $65,127
========== ==========
USANA Health Sciences Inc.
Sales by Market
(in thousands)
Quarter Ended
---------------------------------------------
28-Dec-02 3-Jan-04
----------------------- ---------------------
(Unaudited) (Unaudited)
Region
United States $18,674 48.8% $25,716 43.2%
Canada 8,615 22.5% 12,436 20.9%
Australia-New Zealand 4,950 12.9% 9,078 15.3%
Hong Kong 2,345 6.1% 2,570 4.3%
Japan 1,372 3.6% 2,104 3.5%
Taiwan 2,343 6.1% 4,030 6.8%
Korea 0.0% 1,444 2.4%
Singapore 0.0% 920 1.5%
Wasatch 0.0% 1,188 2.0%
----------- --------- ----------- ---------
$38,299 100.0% $59,486 100.0%
=========== ========= =========== =========
Active Associates by Market
As of
---------------------------------------------
28-Dec-02 3-Jan-04
----------------------- ---------------------
(Unaudited) (Unaudited)
Region
United States 28,000 42.4% 35,000 39.8%
Canada 16,000 24.2% 19,000 21.6%
Australia-New Zealand 11,000 16.7% 13,000 14.8%
Hong Kong 4,000 6.1% 4,000 4.5%
Japan 2,000 3.0% 3,000 3.4%
Taiwan 5,000 7.6% 8,000 9.1%
Korea 0.0% 4,000 4.5%
Singapore 2,000 2.3%
----------- --------- ----------- ---------
66,000 100.0% 88,000 100.0%
=========== ========= =========== =========
Active Preferred Customers by Market
As of
---------------------------------------------
28-Dec-02 3-Jan-04
----------------------- ---------------------
(Unaudited) (Unaudited)
Region
United States 27,000 60.0% 31,000 60.8%
Canada 13,000 28.9% 15,000 29.4%
Australia-New Zealand 4,000 8.9% 4,000 7.8%
Hong Kong 1,000 2.2% 1,000 2.0%
Japan (a) 0.0% (a) 0.0%
Taiwan (a) 0.0% (a) 0.0%
Korea 0.0% (a) 0.0%
Singapore (a) 0.0%
----------- --------- ----------- ---------
45,000 100.0% 51,000 100.0%
=========== ========= =========== =========
(a) Count of Active Preferred Customers is less than 500.
CONTACT: USANA Health Sciences Inc.
Riley Timmer, 801-954-7100
investor.relations@us.usana.com