Exhibit 99
USANA Reports Record Fourth Quarter and Year Results
SALT LAKE CITY--(BUSINESS WIRE)--Feb. 7, 2006--USANA Health
Sciences Inc. (Nasdaq: USNA) today announced record financial results
for the fiscal fourth quarter and for the fiscal year of 2005 (ended
Dec. 31, 2005). Net sales in the fourth quarter increased 15.7% to
$86.9 million, compared with $75.1 million in the fourth quarter of
the prior year. Net sales growth for the fourth quarter of 2005 was
driven by a 16.7% increase in the number of active Associates,
compared to the fourth quarter of the prior year.
Earnings from operations in the fourth quarter of 2005 grew 26.4%
to $15.4 million, or 17.8% of net sales, compared with $12.2 million,
or 16.3% of net sales, in the fourth quarter of the prior year. The
company achieved record net earnings in the fourth quarter of 2005 of
$10.5 million, an increase of 14.5%, compared with net earnings of
$9.2 million in the fourth quarter of the prior year. Earnings per
share in the fourth quarter of 2005 improved to $0.54 per share, an
increase of 17.4%, compared with $0.46 per share in the fourth quarter
of the prior year. Earnings per share in the quarter included an
increase of approximately $0.01 per share due to a lower than expected
effective tax rate.
For the 2005 fiscal year, the company achieved record net sales of
$327.7 million, an increase of 20.1% from $272.8 million for 2004.
Earnings from operations for 2005 were $58.4 million, an increase of
30.1%, compared with $44.8 million in 2004. USANA also reported record
net earnings for 2005 of $39.0 million, or $1.98 per share, an
increase of 26.7% from the $30.8 million, or $1.51 per share, for
2004.
During the fourth quarter of 2005, as expected, inventories
declined by over $3 million, compared with the level reported three
months earlier at Oct. 1, 2005. In addition, the company repurchased
808,000 shares during the fourth quarter of 2005 and approximately
1,160,000 shares during the full year 2005 through the company's stock
repurchase program. The company's cash position at Dec. 31, 2005, was
$10.6 million.
"Our fourth quarter performance illustrates the continued growth
potential of our core operations," commented Dave Wentz, president of
USANA. "Although we did not open any new international markets during
2005, we still achieved record sales and profits. Strong Associate
growth, including 18.6% growth in the U.S., compared with the fourth
quarter of 2004, is the primary driver of our record fourth quarter
sales. We continue to place a significant amount of effort on
retaining and developing Associate leaders, which drives the growth of
our top line.
"While we expected to open one new market in the fourth quarter of
2005," continued Wentz, "the government registration process in that
target country has delayed this opening. We hope to initiate
operations there sometime during 2006. Despite this delay, we believe
there are significant growth opportunities in our 12 existing markets,
and we expect 2006 to be another record year. In addition, although
the Chinese government has not approved multilevel marketing, we
believe the direct selling opportunity there could be significant."
Commenting on USANA's record financial results, Gilbert A. Fuller,
chief financial officer, said, "We are pleased to report
year-over-year sales growth in the fourth quarter in all of our
markets, with the exception of South Korea. Our North American markets
posted excellent growth in the fourth quarter, including the United
States, which grew sales by 22.9% and Associates by 18.6%, compared
with last year. Driven by the launch of our RESET(TM) Program, our
functional foods increased to 11.6% of our total product sales in the
fourth quarter of 2005, compared with 8.8% of our total product sales
in the fourth quarter of the prior year.
"Beginning with the first quarter of 2006," continued Fuller, "we
are required under Statement of Financial Accounting Standards 123(R)
to begin expensing equity compensation. We estimate this expense will
decrease earnings per share by approximately $0.03 in the first
quarter of 2006 and by approximately $0.14 in the full year 2006.
"With respect to guidance," continued Fuller, "we expect net sales
in the first quarter of 2006 to be in the range of $87 million to $89
million, compared with $76.6 million in the first quarter of last
year, a growth rate of 14% to 16%. We expect earnings per share in the
first quarter of 2006 to be between $0.54 and $0.56, excluding the
expensing of equity compensation. After the adjustment for expensing
of equity compensation, we expect earnings per share to be between
$0.51 and $0.53 for the first quarter of 2006.
"For the full year 2006, we reiterate our previous guidance and
expect to grow net sales between 15% and 20% over 2005. Additionally,
we expect earnings per share growth for the full year 2006 to be
between 15% and 20%, excluding the expensing of equity compensation.
This earnings per share estimate also assumes a tax rate for 2006 of
35.5%, compared with the 33.7% tax rate for 2005, which translates to
a reduction of approximately $0.06 per share," concluded Fuller.
USANA will hold a conference call and webcast to discuss this
announcement with investors on Wednesday, Feb. 8, 2006, 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 risks associated with
our 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 Year Ended
--------------------- ----------------------
1-Jan-05 31-Dec-05 1-Jan-05 31-Dec-05
---------- ---------- ---------- -----------
(Unaudited)(Unaudited) (Unaudited)
Net sales $75,130 $86,924 $272,824 $327,742
Cost of sales 18,837 20,747 66,822 78,016
---------- ---------- ---------- -----------
Gross profit 56,293 66,177 206,002 249,726
Operating expenses
Associate incentives 29,055 34,692 104,433 128,698
Selling, general and
administrative 14,633 15,553 54,692 60,326
Research and
development 396 500 2,031 2,339
---------- ---------- ---------- -----------
Earnings from
operations 12,209 15,432 44,846 58,363
Other income 598 217 233 487
---------- ---------- ---------- -----------
Earnings before
income taxes 12,807 15,649 45,079 58,850
Income taxes 3,652 5,168 14,302 19,856
---------- ---------- ---------- -----------
NET EARNINGS $9,155 $10,481 $30,777 $38,994
========== ========== ========== ===========
Earnings per share -
diluted $0.46 $0.54 $1.51 $1.98
========== ========== ========== ===========
Weighted average shares
outstanding - diluted 19,990 19,336 20,415 19,721
========== ========== ========== ===========
USANA Health Sciences Inc.
Consolidated Balance Sheets
(in thousands)
As of As of
1-Jan-05 31-Dec-05
---------- ----------
(Unaudited)
ASSETS
Cash and cash
equivalents $15,067 $10,579
Inventories, net 17,722 22,223
Other current assets 8,034 9,028
---------- ----------
Total current assets 40,823 41,830
Property and equipment, net 23,194 23,302
Goodwill 5,690 5,690
Other assets 1,957 2,886
---------- ----------
Total assets $71,664 $73,708
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $5,106 $4,955
Other current
liabilities 17,644 21,601
---------- ----------
Total current liabilities 22,750 26,556
Other long-term
liabilities 1,071 1,414
Stockholders' equity 47,843 45,738
---------- ----------
Total liabilities and
stockholders' equity $71,664 $73,708
========== ==========
USANA Health Sciences Inc.
Sales by Segment and Region
(in thousands)
Quarter Ended
-------------------------------
1-Jan-05 31-Dec-05
--------------- ---------------
(Unaudited) (Unaudited)
Region
- ------
North America
United States $29,830 39.7% $36,672 42.2%
Canada 15,184 20.2% 16,813 19.3%
Mexico 3,064 4.1% 3,508 4.1%
-------- ------ -------- ------
North America Total $48,078 64.0% $56,993 65.6%
Pacific Rim
Australia-New Zealand 9,881 13.2% 12,141 14.0%
Hong Kong 3,073 4.1% 3,234 3.7%
Japan 2,470 3.3% 2,643 3.0%
Taiwan 4,479 6.0% 4,895 5.6%
South Korea 1,302 1.7% 1,264 1.5%
Singapore 3,019 4.0% 3,425 3.9%
-------- ------ -------- ------
Pacific Rim Total 24,224 32.3% 27,602 31.7%
-------- ------ -------- ------
Segment Total 72,302 96.3% 84,595 97.3%
-------- ------ -------- ------
Contract Manufacturing 2,828 3.7% 2,329 2.7%
-------- ------ -------- ------
Consolidated $75,130 100.0% $86,924 100.0%
======== ====== ======== ======
Active Associates by Region
As of
-------------------------------
1-Jan-05 31-Dec-05
--------------- ---------------
(Unaudited) (Unaudited)
Region
- ------
North America
United States 43,000 37.7% 51,000 38.4%
Canada 22,000 19.3% 23,000 17.2%
Mexico 7,000 6.1% 8,000 6.0%
-------- ------ -------- ------
North America Total 72,000 63.1% 82,000 61.6%
Pacific Rim
Australia-New Zealand 14,000 12.3% 17,000 12.8%
Hong Kong 5,000 4.4% 4,000 3.0%
Japan 4,000 3.5% 5,000 3.8%
Taiwan 9,000 7.9% 13,000 9.8%
South Korea 2,000 1.8% 2,000 1.5%
Singapore 8,000 7.0% 10,000 7.5%
-------- ------ -------- ------
Pacific Rim Total 42,000 36.9% 51,000 38.4%
-------- ------ -------- ------
Total 114,000 100.0% 133,000 100.0%
======== ====== ======== ======
Active Preferred Customers by Region
As of
-------------------------------
1-Jan-05 31-Dec-05
--------------- ---------------
(Unaudited) (Unaudited)
Region
- ------
North America
United States 38,000 60.3% 44,000 62.9%
Canada 17,000 27.0% 18,000 25.7%
Mexico 1,000 1.6% 1,000 1.4%
-------- ------ -------- ------
North America Total 56,000 88.9% 63,000 90.0%
Pacific Rim
Australia-New Zealand 5,000 7.9% 6,000 8.6%
Hong Kong 1,000 1.6% (a) 0.0%
Japan 1,000 1.6% 1,000 1.4%
Taiwan (a) 0.0% (a) 0.0%
South Korea (a) 0.0% (a) 0.0%
Singapore (a) 0.0% (a) 0.0%
-------- ------ -------- ------
Pacific Rim Total 7,000 11.1% 7,000 10.0%
-------- ------ -------- ------
Total 63,000 100.0% 70,000 100.0%
======== ====== ======== ======
(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)
investor.relations@us.usana.com