Exhibit 99.1
USANA Announces Record First
Quarter Results; Net Sales Up 24 Percent; Net Earnings Up 44 Percent;
Earnings Per Share Up 50 Percent
SALT LAKE CITY--(BUSINESS WIRE)--April 19, 2005--USANA Health
Sciences Inc. (NASDAQ: USNA) today announced record financial results
for the first fiscal quarter of 2005 (ended April 2, 2005). The
company achieved record net sales in the first quarter of $76.6
million, an increase of 24%, compared with $61.8 million in the first
quarter of 2004. This growth was driven by a 24% increase in the
number of active Associates and by increasing sales of the company's
recently reformulated line of skin and personal care products, Sense.
Earnings from operations in the first quarter of 2005 grew to
$13.6 million, or 18% of net sales, compared with $9.3 million, or 15%
of net sales, in the first quarter of 2004. The company achieved net
earnings in the first quarter of 2005 of $8.9 million, an increase of
44%, compared with net earnings of $6.2 million in the first quarter
of 2004. Earnings per share in the first quarter increased to $0.45
per share, an increase of 50%, compared with $0.30 per share in the
first quarter of 2004.
"We are pleased to report our 11th consecutive quarter of record
net sales," said Dave Wentz, president of USANA. "We are particularly
pleased with the fact that we achieved double-digit, year-over-year
growth in all but one of our markets. Also, overall, the number of our
active Associates grew to 119,000, an increase of 24%, compared with
our first quarter of last year. The demand for our recently
reformulated Sense products has grown, and our Associates have used
this opportunity to build their businesses through the sale of these
revolutionary, self-preserving products. We expect strong demand for
these products in the future. We have increased our inventory of these
products in each of our markets so that we can begin to market them
more aggressively."
"Our primary strategy is to increase sales in our existing
markets," continued Wentz. "We also are working to open one new market
before the end of the third quarter of 2005, and we will make an
announcement as the time for that opening approaches."
Gilbert A. Fuller, USANA's chief financial officer, said, "We are
pleased with our record results for the first quarter. Our operating
margin improved significantly, both sequentially and compared with the
first quarter of last year in which, notably, our earnings were
reduced by the costs of our entry into Mexico. We continue to improve
our operating efficiencies, especially in the manufacture of our Sense
products at our Wasatch facility. Our inventories in the first quarter
increased by approximately $5 million, which was primarily a result of
the build-up in our Sense products."
"With respect to guidance," Fuller continued, "we expect net sales
in the second quarter of 2005 to be $78 million to $80 million, an
increase of as much as 19%, compared with $67.2 million in the second
quarter of last year. We also expect earnings per share in the second
quarter of 2005 to be $0.46 to $0.47, an increase of as much as 31%,
compared with $0.36 in the second quarter of last year. We remain
optimistic about the prospects for the full year 2005. We reiterate
our previous guidance for 2005 net sales to be between $319 and $327
million, representing 17% to 20% growth compared with 2004. Also,
given our improving margin trend, we are raising our guidance for
earnings per share for 2005 to be $1.85 to $1.90."
USANA will hold a conference call and webcast to discuss this
announcement with investors on Wednesday, April 20, 2005 at 11 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, Mexico, the Netherlands and the United Kingdom. More
information on USANA can be found at
http://www.usanahealthsciences.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. Actual results could differ materially from
those projected in these forward-looking statements, which involve a
number of risks and uncertainties, including reliance upon our network
of independent Associates, the governmental regulation of our
products, manufacturing and marketing risks and uncertainties
associated with our planned international expansion. 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.
USANA Health Sciences Inc.
Consolidated Statements of Earnings
(In thousands, except per share data)
Quarter Ended
---------------------
3-Apr-04 2-Apr-05
---------- ----------
(Unaudited)(Unaudited)
Net sales $61,775 $76,578
Cost of sales 15,058 18,010
---------- ----------
Gross profit 46,717 58,568
Operating expenses
Associate incentives 23,612 29,550
Selling, general and
administrative 13,262 14,849
Research and development 578 599
---------- ----------
Earnings from operations 9,265 13,570
Other income 149 165
---------- ----------
Earnings before income taxes 9,414 13,735
Income taxes 3,201 4,807
---------- ----------
NET EARNINGS $6,213 $8,928
========== ==========
Earnings per share - diluted $0.30 $0.45
========== ==========
Weighted average shares outstanding
- diluted 20,853 19,971
========== ==========
USANA Health Sciences Inc.
Consolidated Balance Sheets
(in thousands)
As of As of
1-Jan-05 2-Apr-05
---------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $15,067 $22,033
Inventories 17,722 22,624
Other current assets 8,034 8,628
---------- -----------
Total current assets 40,823 53,285
Property and equipment, net 23,194 24,710
Goodwill 5,690 5,690
Other assets 1,957 1,793
---------- -----------
Total assets $71,664 $85,478
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $5,106 $5,121
Other current liabilities 17,644 18,526
---------- -----------
Total current liabilities 22,750 23,647
Other long-term liabilities 1,071 1,571
Stockholders' equity 47,843 60,260
---------- -----------
Total liabilities and stockholders' equity $71,664 $85,478
========== ===========
USANA Health Sciences Inc.
Sales by Market
(in thousands)
Quarter Ended
-----------------------------------
3-Apr-04 2-Apr-05
----------------- -----------------
(Unaudited) (Unaudited)
Region
United States $27,101 43.9% $31,203 40.7%
Canada 12,437 20.1% 14,862 19.4%
Australia-New Zealand 8,276 13.4% 10,644 13.9%
Hong Kong 2,457 4.0% 3,040 4.0%
Japan 2,216 3.6% 2,498 3.3%
Taiwan 3,729 6.0% 5,064 6.6%
Korea 1,270 2.1% 1,045 1.4%
Singapore 2,007 3.2% 3,100 4.0%
Mexico 748 1.2% 3,193 4.2%
Wasatch 1,534 2.5% 1,929 2.5%
---------- ------ ---------- ------
$61,775 100.0% $76,578 100.0%
========== ====== ========== ======
Active Associates by Market
As of
-----------------------------------
3-Apr-04 2-Apr-05
----------------- -----------------
(Unaudited) (Unaudited)
Region
United States 38,000 39.6% 45,000 37.8%
Canada 19,000 19.8% 22,000 18.5%
Australia-New Zealand 13,000 13.5% 15,000 12.6%
Hong Kong 4,000 4.2% 5,000 4.2%
Japan 4,000 4.2% 4,000 3.4%
Taiwan 8,000 8.3% 10,000 8.4%
Korea 3,000 3.1% 2,000 1.7%
Singapore 4,000 4.2% 8,000 6.7%
Mexico 3,000 3.1% 8,000 6.7%
---------- ------ ---------- ------
96,000 100.0% 119,000 100.0%
========== ====== ========== ======
Active Preferred Customers by Market
As of
-----------------------------------
3-Apr-04 2-Apr-05
----------------- -----------------
(Unaudited) (Unaudited)
Region
United States 34,000 61.8% 40,000 60.6%
Canada 16,000 29.1% 18,000 27.3%
Australia-New Zealand 4,000 7.3% 5,000 7.6%
Hong Kong 1,000 1.8% 1,000 1.5%
Japan (a) 0.0% 1,000 1.5%
Taiwan (a) 0.0% (a) 0.0%
Korea (a) 0.0% (a) 0.0%
Singapore (a) 0.0% (a) 0.0%
Mexico (a) 0.0% 1,000 1.5%
---------- ------ ---------- ------
55,000 100.0% 66,000 100.0%
========= ======= ========= ======
(a) Count of Active Preferred Customers is less than 500.
CONTACT: USANA Health Sciences Inc., Salt Lake City
Riley Timmer, 801-954-7100
investor.relations@us.usana.com