Exhibit 99
USANA Reports Record First Quarter Net Sales
SALT LAKE CITY--(BUSINESS WIRE)--April 18, 2006--USANA Health
Sciences Inc. (Nasdaq:USNA) today announced record net sales for the
fiscal first quarter of 2006 (ended April 1). Net sales in the first
quarter of 2006 increased 17.1% to $89.7 million, compared with $76.6
million in the first quarter of the prior year. Net sales growth for
the first quarter of 2006 was driven primarily by a 14.3% increase in
the number of active Associates, compared with the first quarter of
the prior year.
Earnings from operations in the first quarter of 2006 grew 7.1% to
$14.5 million, or 16.2% of net sales, compared with $13.6 million, or
17.7% of net sales, in the first quarter of the prior year. Earnings
from operations in the first quarter of 2006 were reduced by $947,000
due to the newly required expensing of equity-based compensation. The
company achieved net earnings in the first quarter of 2006 of $9.6
million, an increase of 7.1%, compared with net earnings of $8.9
million in the first quarter of the prior year. Earnings per share in
the first quarter of 2006 improved to $0.50 per share, an increase of
11.2%, compared with $0.45 per share in the first quarter of the prior
year. Earnings per share in the first quarter of 2006 were reduced by
$0.03 due to the newly required expensing of equity-based
compensation.
"In North America, the number of Associates grew by 14.7%, with a
22.1% increase in sales," commented Dave Wentz, president of USANA.
"In the U.S., the number of Associates grew by 20.0%, with a 25.2%
increase in sales. These results give us confidence that we can
continue to grow in our mature markets over the long term.
"Regarding our products, we continue to achieve growth across each
of our product lines," continued Wentz. "Following the successful
launch of our RESET(TM) Weight Management Program, at our
international convention in September, we have experienced strong
sales growth of our low-glycemic, macro optimizer products, which grew
to 13.1% of product sales in the first quarter. We believe each of our
product categories has benefited from the investments we have made in
our Associate sales tools and in our sampling and incentive programs.
"While we continue to expect to open one new market in 2006,"
continued Wentz, "the government registration process in that target
country has further delayed that opening. Despite this, and based upon
our current momentum, we believe 2006 will be another record year."
Commenting on USANA's financial results, Gilbert A. Fuller, chief
financial officer, said, "We are pleased to report strong double-digit
sales growth in the first quarter, compared with the prior year
period. These results reflect growth in all of our markets, except in
Japan and Taiwan, where we expect to see positive trends as the year
progresses. In addition to these excellent results in our North
American markets, Singapore grew 14.2% compared with last year. We
attribute much of this strength to our Asia-Pacific convention, which
was held for the first time in late March and was attended by many of
our Associate leaders in that region.
"As we indicated in our 2005 fourth quarter press release, we are
now required under Statement of Financial Accounting Standards 123(R)
to expense equity-based compensation, beginning with the first quarter
of 2006," continued Fuller. We estimate this expense will decrease our
earnings per share for the full year 2006 by approximately $0.15.
"With respect to guidance," continued Fuller, "we expect net sales
in the second quarter of 2006 to be in the range of $92 million to $94
million, compared with $82.0 million in the second quarter of last
year, a growth rate of 12% to 15%. We expect earnings per share in the
second quarter of 2006 to be between $0.54 and $0.56, excluding the
expensing of equity-based compensation. After the adjustment for
expensing of equity-based compensation, we expect earnings per share
for the second quarter of 2006 to be between $0.51 and $0.53.
"For the full year 2006," continued Fuller, "we reiterate our
previous guidance and expect to grow net sales between 15% and 20%,
compared with 2005. Additionally, we expect earnings per share growth
for the full year 2006 to be between 15% and 20%, excluding the
expensing of equity-based 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 for the full year."
USANA will hold a conference call and webcast to discuss this
announcement with investors on Wednesday, April 19, 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
---------------------
2-Apr-05 1-Apr-06
---------- ----------
(Unaudited)(Unaudited)
Net sales $76,578 $89,651
Cost of sales 18,010 21,338
---------- ----------
Gross profit 58,568 68,313
Operating expenses
Associate incentives 29,550 35,428
Selling, general and
administrative 14,849 17,626
Research and development 599 732
---------- ----------
Earnings from operations 13,570 14,527
Other income 165 295
---------- ----------
Earnings before income taxes 13,735 14,822
Income taxes 4,807 5,262
---------- ----------
NET EARNINGS $8,928 $9,560
========== ==========
Earnings per share - diluted $0.45 $0.50
========== ==========
Weighted average shares outstanding
- diluted 19,971 19,239
========== ==========
USANA Health Sciences Inc.
Consolidated Balance Sheets
(in thousands)
As of As of
31-Dec-05 1-Apr-06
---------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $10,579 $25,505
Inventories 22,223 21,295
Other current assets 9,028 9,598
---------- -----------
Total current assets 41,830 56,398
Property and equipment, net 23,302 23,489
Goodwill 5,690 5,690
Other assets 2,886 2,771
---------- -----------
Total assets $73,708 $88,348
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $4,955 $5,652
Other current liabilities 21,601 24,624
---------- -----------
Total current liabilities 26,556 30,276
Other long-term liabilities 1,414 832
Stockholders' equity 45,738 57,240
---------- -----------
Total liabilities and stockholders' equity $73,708 $88,348
========== ===========
USANA Health Sciences Inc.
Sales by Segment and Region
(in thousands)
Quarter Ended
--------------------------------
2-Apr-05 1-Apr-06
--------------- ----------------
(Unaudited) (Unaudited)
Region
- ------
North America
United States $31,203 40.7% $39,057 43.6%
Canada 14,862 19.4% 16,979 18.9%
Mexico 3,193 4.2% 4,098 4.6%
-------- ------ -------- ------
North America Total $49,258 64.3% $60,134 67.1%
Pacific Rim
Australia-New Zealand 10,644 13.9% 11,274 12.6%
Hong Kong 3,040 4.0% 3,176 3.5%
Japan 2,498 3.3% 2,432 2.7%
Taiwan 5,064 6.6% 4,981 5.6%
South Korea 1,045 1.4% 1,216 1.4%
Singapore 3,100 4.0% 3,540 3.9%
-------- ------ -------- ------
Pacific Rim Total 25,391 33.2% 26,619 29.7%
-------- ------ -------- ------
Segment Total 74,649 97.5% 86,753 96.8%
-------- ------ -------- ------
Contract Manufacturing 1,929 2.5% 2,898 3.2%
-------- ------ -------- ------
Consolidated $76,578 100.0% $89,651 100.0%
======== ====== ======== ======
Active Associates by Region
As of
---------------------------------
2-Apr-05 1-Apr-06
---------------- ----------------
(Unaudited) (Unaudited)
Region
- ------
North America
United States 45,000 37.8% 54,000 39.7%
Canada 22,000 18.5% 23,000 16.9%
Mexico 8,000 6.7% 9,000 6.6%
-------- ------ -------- ------
North America Total 75,000 63.0% 86,000 63.2%
Pacific Rim
Australia-New Zealand 15,000 12.6% 17,000 12.5%
Hong Kong 5,000 4.2% 5,000 3.7%
Japan 4,000 3.4% 5,000 3.7%
Taiwan 10,000 8.4% 13,000 9.6%
South Korea 2,000 1.7% 1,000 0.7%
Singapore 8,000 6.7% 9,000 6.6%
-------- ------ -------- ------
Pacific Rim Total 44,000 37.0% 50,000 36.8%
-------- ------ -------- ------
Total 119,000 100.0% 136,000 100.0%
======== ====== ======== ======
Active Preferred Customers by Region
As of
---------------------------------
2-Apr-05 1-Apr-06
--------------- ----------------
(Unaudited) (Unaudited)
Region
- ------
North America
United States 40,000 60.6% 46,000 63.0%
Canada 18,000 27.3% 18,000 24.7%
Mexico 1,000 1.5% 2,000 2.7%
-------- ------ -------- ------
North America Total 59,000 89.4% 66,000 90.4%
Pacific Rim
Australia-New Zealand 5,000 7.6% 6,000 8.2%
Hong Kong 1,000 1.5% (a) 0.0%
Japan 1,000 1.5% 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 10.6% 7,000 9.6%
-------- ------ -------- ------
Total 66,000 100.0% 73,000 100.0%
======== ====== ======== ======
(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