Exhibit 99
USANA Announces Record Second Quarter Sales and Profits
SALT LAKE CITY--(BUSINESS WIRE)--July 19, 2005--
Net Sales up 22 Percent; Earnings Per Share up 33 Percent
USANA Health Sciences Inc. (NASDAQ:USNA) today announced record
financial results for the second fiscal quarter of 2005 (ended July 2,
2005). The company achieved record net sales in the second quarter of
$82 million, an increase of 22%, compared with $67.2 million in the
second quarter of 2004. This growth was primarily driven by a 20%
increase in the number of active associates and double-digit,
year-over-year net sales gains achieved in all but one of the
company's 12 markets.
Earnings from operations in the second quarter of 2005 grew 31.3%
to $14.7 million, or 18% of net sales, compared with $11.2 million, or
16.7% of net sales, in the second quarter of 2004. The company
achieved net earnings in the second quarter of 2005 of $9.5 million,
an increase of 28.7%, compared with net earnings of $7.4 million in
the second quarter of 2004. Earnings per share in the second quarter
increased to $0.48 per share, an increase of 33.3%, compared with
$0.36 per share in the second quarter of 2004.
For the six-month period ended July 2, 2005, net sales were $158.6
million, an increase of 22.9%, compared with $129 million in the first
six months of 2004. Earnings from operations for the first six months
of 2005 were $28.3 million, an increase of 38.2%, compared with $20.5
million for the same period in 2004. The company achieved net earnings
in the first six months of 2005 of $18.5 million, an increase of
35.6%, compared with net earnings of $13.6 million in the first six
months of 2004. Earnings per share increased 41% in the first six
months of 2005 to $0.93, compared with $0.66 in the first six months
of 2004.
During the second quarter, the company, through its current share
buyback program, purchased and retired 353,000 shares for an
investment of $15 million. Approximately $25 million remains under the
share buyback authorization.
"We are pleased to report our 12th consecutive quarter of record
net sales," said Dave Wentz, president of USANA. "On a year-over-year
basis, we achieved double-digit growth in all but one of our 12
markets. Mexico was a particularly strong performer in the quarter,
posting sales gains of over 76% and associate growth of 80%, compared
with the same period in the prior year. In addition, Taiwan and
Singapore both posted impressive revenue growth of 38%. In line with
sales, the number of active associates grew to 125,000, an increase of
20%, compared with the second quarter of last year. Furthermore, sales
grew sequentially in all of our markets.
"We continue to execute our strategy to increase sales in our
existing markets," continued Wentz. "In the third quarter, we will
begin an initiative of increasing the investment in our associates. We
believe this initiative will bring additional associates into the
business and accelerate our top-line growth. We also continue to
prepare for opening a new market, which we now believe will occur in
the fourth quarter."
Gilbert A. Fuller, USANA's chief financial officer, said, "We
achieved another outstanding quarter for both sales and earnings.
Operating profit improved both year over year and sequentially in the
second quarter to 18% of net sales. This improvement was primarily
driven by proportionately lower SG&A expenses.
"To update our guidance," Fuller continued, "we expect net sales
in the third quarter of 2005, typically our slowest quarter of
sequential growth, to be $82 million to $84 million, an increase of as
much as 22%, compared with $68.7 million in the third quarter of last
year. We also expect earnings per share in the third quarter of 2005
to be $0.47 to $0.49, as we begin our initiative to provide additional
incentives to our associates. In addition, we are increasing our
previously announced guidance for 2005. We now believe that net sales
for the full year will be between $325 million and $330 million. This
represents sales growth of 19% to 21%, compared with 2004. Finally, we
now believe earnings per share for 2005 will be between $1.88 and
$1.92, representing growth of 25% to 27%, compared with 2004."
USANA will hold a conference call and webcast to discuss this
announcement with investors on Wednesday, July 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-Jul-04 2-Jul-05
----------- -----------
(Unaudited) (Unaudited)
Net sales $ 67,246 $ 82,015
Cost of sales 16,195 19,499
----------- -----------
Gross profit 51,051 62,516
Operating expenses
Associate incentives 25,556 31,911
Selling, general and administrative 13,656 15,168
Research and development 607 689
----------- -----------
Earnings from operations 11,232 14,748
Other income (expense) (1) (67)
----------- -----------
Earnings before income taxes 11,231 14,681
Income taxes 3,818 5,138
----------- -----------
NET EARNINGS $ 7,413 $ 9,543
=========== ===========
Earnings per share - diluted $ 0.36 $ 0.48
=========== ===========
Weighted average shares outstanding -
diluted 20,523 19,821
=========== ===========
Six Months Ended
-------------------------
3-Jul-04 2-Jul-05
----------- -----------
(Unaudited) (Unaudited)
Net sales $129,021 $158,593
Cost of sales 31,253 37,509
----------- -----------
Gross profit 97,768 121,084
Operating expenses
Associate incentives 49,168 61,461
Selling, general and administrative 26,918 30,017
Research and development 1,185 1,288
----------- -----------
Earnings from operations 20,497 28,318
Other income (expense) 148 98
----------- -----------
Earnings before income taxes 20,645 28,416
Income taxes 7,019 9,945
----------- -----------
NET EARNINGS $ 13,626 $ 18,471
=========== ===========
Earnings per share - diluted $ 0.66 $ 0.93
=========== ===========
Weighted average shares outstanding -
diluted 20,688 19,896
=========== ===========
USANA Health Sciences Inc.
Consolidated Balance Sheets
(in thousands)
As of As of
1-Jan-05 2-Jul-05
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 15,067 $ 20,428
Inventories, net 17,722 22,044
Other current assets 8,034 7,611
----------- -----------
Total current assets 40,823 50,083
Property and equipment, net 23,194 23,233
Goodwill 5,690 5,690
Other assets 1,957 2,812
----------- -----------
Total assets $ 71,664 $ 81,818
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 5,106 $ 4,814
Other current liabilities 17,644 20,706
----------- -----------
Total current liabilities 22,750 25,520
Other long-term liabilities 1,071 1,495
Stockholders' equity 47,843 54,803
----------- -----------
Total liabilities and stockholders' $ 71,664 $ 81,818
equity =========== ===========
USANA Health Sciences Inc.
Sales by Market
(in thousands)
Quarter Ended
---------------------------------------
3-Jul-04 2-Jul-05
------------------ -----------------
(Unaudited) (Unaudited)
Region
United States $ 27,821 41.4% $ 33,067 40.3%
Canada 12,378 18.4% 15,287 18.6%
Australia-New Zealand 8,471 12.6% 11,241 13.7%
Hong Kong 2,750 4.1% 3,377 4.1%
Japan 2,176 3.2% 2,620 3.2%
Taiwan 3,898 5.8% 5,381 6.6%
Korea 1,804 2.7% 1,323 1.6%
Singapore 2,612 3.9% 3,606 4.4%
Mexico 2,216 3.3% 3,910 4.8%
Contract Manufacturing 3,120 4.6% 2,203 2.7%
--------- ------ --------- ------
$ 67,246 100.0% $ 82,015 100.0%
========= ====== ========= ======
Active Associates by Market
As of
---------------------------------------
3-Jul-04 2-Jul-05
------------------ -----------------
(Unaudited) (Unaudited)
Region
United States 40,000 38.5% 46,000 36.8%
Canada 20,000 19.2% 22,000 17.6%
Australia-New Zealand 13,000 12.5% 16,000 12.8%
Hong Kong 5,000 4.8% 5,000 4.0%
Japan 4,000 3.8% 4,000 3.2%
Taiwan 8,000 7.7% 12,000 9.6%
Korea 3,000 2.9% 2,000 1.6%
Singapore 6,000 5.8% 9,000 7.2%
Mexico 5,000 4.8% 9,000 7.2%
--------- ------ --------- ------
104,000 100.0% 125,000 100.0%
========= ====== ========= ======
Active Preferred Customers by Market
As of
---------------------------------------
3-Jul-04 2-Jul-05
------------------ -----------------
(Unaudited) (Unaudited)
Region
United States 36,000 61.0% 41,000 62.1%
Canada 16,000 27.1% 18,000 27.3%
Australia-New Zealand 5,000 8.5% 5,000 7.6%
Hong Kong 1,000 1.7% (a) 0.0%
Japan (a) 0.0% 1,000 1.5%
Taiwan 1,000 1.7% (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%
--------- ------ --------- ------
59,000 100.0% 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