USNA - Earnings call transcript Q1 2020 | USANA Health Sciences, Inc.

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Operator

Good day and welcome to the USANA Health Sciences’ First Quarter Conference Call. Today’s conference is being recorded. And at this time, I would like to turn the conference over to Mr. Patrique Richards, Executive Director of Investor Relations and Business Development. Please go ahead.

Patrique Richards

morning. Good joining to you quarter our this results. us appreciate review morning first We is via broadcast be conference being Today’s call live from website accessed our webcast at ir.usana.com. directly can and available call, replay the website. following Shortly will be on a our

the cause operations this outlook perhaps statements As year will projected caution call, you of uncertainties financial involve results these events fiscal the the financial risks related duration make course specific results. statements of as uncertainty materially that performance of could future in management future in and regarding considered with and factors and should conference including financial to data those forward-looking business, the a the actual most impact disclosures, statements about for contained pandemic our such the conjunction differ statements. our reminder, statements or these and as during scope from SEC. regarding results of filings risk to forward-looking COVID-XX strategies with company. our and in that Those Examples XXXX We magnitude, the be well our recent to include

CEO, world to this the notice. the our company’s to on our results we Kevin this I office non-distribution market Jim unable in majority first in USANA begin, To dialed remotely further we joined to that to and Guest document attend successfully like home point morning, expect Hekking Yesterday President, Financial employees posted the homes. the our home management implemented follow the have non-manufacturing In Brown; around of closed, outlook February, as our by call our Officer, from work commentary, Chief call executives. other is and am until and our on Doug website. after announced our well plan Although results their early from as respective quarter plan we the would and employees and

remarks Jim call from for brief now will before questions. the hear We opening

Jim Brown

whirlwind Good with of But past joining marked our us also disruption you that a by at the us. all moments for to operations. morning part been and proud of in here be have filled company. this time thank us has The USANA business lives challenges been and make for personal several months and

We every to and employees have solve of are asked a our make associates we and to aspect the lot business. as our have challenges and of quickly in around had nearly professionally real-time adjustments world responding they

overnight deliveries in For Philippines moved building on shipping order to example, new their employees keep time. to USANA in the a facility

center challenges in comes and Our continued working are home to call associates from just and overcome day team each future. the new for days our planning X together leadership

I for impacted that the Before COVID-XX. questions, been like areas to opening the have would call key business on few a address up by

remained distribution our First, operational. fully manufacturing and mobile have

continue to products ship to manufacture the orders We and world. homes around

is in using an place standards. facility manufacturing high-quality As manufacturing practices to always, taking our good maintain exceptionally clean

distancing distribution to have employees also including our customers, measures physical checks safety equipment, of additional including and employees temperature keep to manufacturing We added protect protective and masks, and our safe.

and our continue we address supply to actively they chain manage that Second, arise. challenges

orders. all quickly As addressed demand our high health have temporary experience high-quality have products. indicate, our results and our inventory ample teams, has Generally, continued first operations quarter for we in we our to any of backlog markets

important associates at potential it’s continue many time to to nutrition. improve support when for are searching to our provide their we a Third, that customers ways

service via the or same associates whether great with our to frequent to live. ensure WhatsApp every We familiar phone, resources. continue and online market customers tools training are sales in our importantly, that’s our are and customer And that holding associates e-mail, receive

development. product nutritional advancing is and year. continue development through research new next We launches fully product still and expect hard at on our work personal team over new Fourth, to wellness the

are and large associate online. from sponsored USANA creative events Finally, of being our most shift we

deliver team and Our in to and as to we person hope working be motivating will is associates our that content events. customer as engaging homes

know the through will to that and bring, be was months believe USANA’s than with navigate certainty business can’t am I’ll with it to will do strength the what the stronger next USANA’s we USANA now and we a on adapt please long-term keep With events the business open Although line as in for few continue we ask confident track. everything these will that, operator unprecedented I to before. questions. mindset, can underlying we of

Operator

[Operator question you. Wissink with we’ll first Jefferies. Instructions] take our ahead. Steph from Thank And Go

Steph Wissink

everyone. morning, Good you. Thank

We have could. questions if we two

a us The in is back talk that quarter-to-quarter some just confidence bit more. how would you scope June seeing your we what think half, sense about about the little about around Can in a helpful you That you’re to modeling June first be unpack this acceleration should quarter in bit very quarter? guidance then, half and to and the back think just you give implied maybe acceleration? know, the

Doug Hekking

Doug. this Stephanie, Yes, is

range back product in appropriately the million and first there then from of probably reflect and mark we do and from quarter-to-quarter quarter. is launches right timing around promotions The with QX that dynamic some earnings in $XXX our biggest see in We’re some you build. go

seeing expectation. teams products, settling in had generally it of our up particularly definitely bit sales across and the and launch a globe, the demand of picks seen a from of with product we’ve the but that back just in down half of that’s plans little of our we China, the kind I noticeable think certain year

Steph Wissink

was to Okay. business things because generally, about coronavirus year as unusual we you developing function maybe the think as a post of many able And how that as the for proxy, think a What case to how proxy for the ‘XX give about contribution important Maybe does that year? of half a I of some down the into period this recovery should and last the we isolate very are think us to and well, looking renewal you during back China the it’s back so guys market I at were that at even how period. worldwide. the course bridge base implement of should a sense China year market looking over the more then want then help recognizing

Jim Brown

Yes, for great this where this momentum it We We plans is excited Jim. that. looking We had campaign had interesting past, China China the we when and last in was said, already was the were and was our are see challenges seen in with really for a and then were and the prepared change come going. we XXX-day were about China lot the and first kind enough some at the XXXX one pandemic year back the you XXXX now had really opening ahead up right the of and of itself. where is economy and you of market information a where like in curve

us, as well. we’re For seeing that

For provincial had New majority now per were those a weeks Year. offices and closed those the a request Chinese down, while, an we the that back our opened extended government’s We extended up. few of are and

have the of where few be going months is in because though offices are can us, amount those we the come opened, over a on China For field challenge restrictions few and there still next those limited playing offices. people to weeks what’s even the into

meetings. smaller have We

have of that from pick momentum are having over smaller meetings couple up. challenge really in getting were to we the systems online ahead see and online, forced and us of its of IT running. standpoint a prepared that for to the curve working us were up done IT we what them and the us for really but lot go an on Luckily, So past place has we this years just systems because where our

Steph Wissink

just physical us that wellness thinking within the because development, about pipeline, you’re shift a nice sense mental well-being can in on focused might that see new a product or to be you. if you post-crisis towards more Thank general half? we with one driver your give you’re a respect of mentioned And Okay. anything attitude pipeline in do that development product or you how back well-being,

Jim Brown

won’t in on field – products create specifics new give development, development help of we because our announcements naming we our Yes, and products to that use momentum have I product and product in kind foods line we of going upgrade our to next year. have the about nutrition, still launched to that that’s we excitement, an our have early be past active talked but

We that. are specific for working on products

to X but and have August, products products at Asia-Pacific additional the designated event, and talked we canceled we’re events. that timeframe. then we essentials so to at be Americas launched May that would’ve an And again, planning released China are are did then Asia-Pacific China, throughout well. year – convention, but our are in face-to-face And in to meeting have in we that we up time have have that the have or our that canceled Doug slated in intention that we we’ve as to have year, at our and products but X I the launched be going earlier mentioned had we on it that’s we online, just about in online sell been doing a from an We that but Europe to more products

kind of and excitement and development the is again going in product to of going half the that’s momentum help year. where the So the last that’s

Steph Wissink

much. very you Thank

Jim Brown

Thanks, Stephanie.

Operator

And Go from Lane with Doug our Lane question Research. come will next ahead.

Doug Lane

morning, Yes, hi. everybody. Good

the the product global the pandemic issue, already mix just have year product progressed? as Just in any spread maybe has on the with shift you the unexpected of seen

Jim Brown

opportunity those and this, field products, Yes, first the in C being a and has huge where that with gone some impactful we at That’s that’s make what specific they comfortable quarter, a timing, Doug, company, the just mean the products has health of tenfold helped of again for see literally feel we and use Proflavanol, for the up take I them a fact you have few and not field our the but that the us Booster what times do been sure perception the quarter. from own health great have part, timing that the other demand had those probably to it’s ones but somewhat first not from beginning. to the part a seen their products us at really

We of seen yes, fade that little that to run-rates the bit back and lower a some that. our normal is and are have we inventory seeing and we that inventory fact explain kind down of but that, would when talk about that’s

we the the a to We how down the that are regulators now in and path on don’t at We very claim right explain there products claims of make. looking what get that making our us. they end careful go want do out

Doug Hekking

is And this Doug, Doug.

so and context function products were some definitely we saw so designed well. did those our small of a saw to as on we bit were and that a those Jim’s products immune products in these pickup percentage some relatively of little to sales a of point, purchasing Just see that substitute we support collectively

though buying level quarter So other in buying to we a that a and shift lift saw did some see stuff. not even some the we higher also at

to put small So I it that in just part was context. a want quarter. of the relatively additive, It was but

Doug Lane

fair an about the the income towards we thought certainly economy associates, are about of slowing pivot the you And half so you to talking Okay, while a opportunity year? have on little in opportunity back might your enough. of the topic then more provide income how bit

Jim Brown

increase. when on you selling Yes, group are marketing, have part selling gone seen of when and our multi-level or at direct focused shifted about and business once companies direct a economies I a companies historical first. as focused mean, big with health their look have the USANA, Doug. That’s we you products it. down, economy We talk the

our belief with So will hope become I because introduce products best see people our business want an that the from and the products a we products to first our and see path our opportunity to business start We the always in then and don’t products that people they our our with go that associate. world. when in go we changing business. taking is the down way product by are to the we of an lead

the about is that I don’t there but first. focus us So, the we are opportunity, see business talking that changing

Doug Lane

Okay.

versus looking the your customers, of rapidly at quarter. number of outside and associate Greater of been in in customers am has the particularly outside my here mean China China, they I Greater One accelerated growing was Asia upsides and first the productivity the Asia, preferred preferred I

give towards you color those customer what’s that of in growth us So, markets? kind driving can some

Jim Brown

that of mean the Yes. the the types some XX we environment, sell. been we last have customer to pretty think it emphasizing continues think year that company I in products that over Doug, really this think I of I well, months, for profile I really resonates particularly and

in types see sold you some well as products What of that there. contributed as the during the overall productivity little definitely a of that bit think I So, China and quarter but we be pickup we in that emphasis the the for to is will the of figure productivity continue be customer promotion to referenced, – as were that an future the focus foreseeable that you that additive have well. go back on

Doug Lane

thanks. actual can what Okay, thing, associates? last you That’s being And remind helpful. those opportunity just to is one the into preferred customers convert me,

Jim Brown

Yes, I think we it. see

but China they product China, product similar, as looked mouth at didn’t discounts some has definitely and there. have customer it in some to similar potential comes that get back – there. our and so in some go as in they opportunity definitely kind back remember everybody for business, We different roll intent get referring as of markets products, of a free You or and plans we word the success relates and a China in that also referring other spread have and free we something the of outside go to markets, had excuse have me, customers

think know, lot You intent. I of based upon sign their up people a

you associate carry weight. who do really products passionate to path So are an think think the but I up are don’t converting there folks see have some some definitely huge the a just I end and of and opportunity a and I about good think I numbers, think be successful they because they being

the impact to So if small, I but successful. numbers are I be business the think pretty additive think we can the are

Doug Lane

Jim. Thanks, Doug. thanks, Okay,

Operator

Ivan from we will question Please final Tigress with Partners. Financial our ahead. Feinseth go take And

Ivan Feinseth

and for you stock. taking the nice questions. reaction the in my Congratulations results Thank great the on

be are that you we’re see increasing one see did the in some this to say supplements you cases see belief taking ways nice boosting a the to did you they’ve immune an speaking do and and theme to products horrible that healthy good in be to focus at much least – of products. in companies nutritional Following a pursue spike of maybe – upsides big is out many the and one situation other these the is that is a – best complement pretty I of that there have healthy diet immune because sold boosting you on saying I’m of

you So kind in have interest what of seen these products?

Jim Brown

the of when to can five weeks reacted this of availability we and it inventory the tremendous We management and of products. Yes, came chain. numbers out and some four probably issues refill especially quickly inventory quickly interest products well I caused reacted our you saw overall, when some came we’ve mean but for a see initially it that ago, to as quarter, supply with or amount in the short-term

We’re shape in good very with that.

the come healthy seen in but you of continue a make normal just that story lifestyle be we’ve past. that supplements healthy We tell that person and sure that to range seeing you’re continue to a saying, now, we’re like kind as back of to a into right

this So highlighted. future and those on were quarter we feel the very products comfortable that for

Ivan Feinseth

happened reflecting are improve try you what going happening in months, it direction product and do as as like from far marketing for and to see the past and couple that? company what’s you And your kind upon of new take to then development of things new initiatives what’s

Jim Brown

Europe release to in product convention, planned when strategy, really in as would that we also online Yes, China earlier, timeframe November. will Meeting Americas products our new the that. at overall our We development we products haven’t like strategies said I have APC our be National you do already and well around look August changed around and

go I group gone but change and specific the to going any we We identified again, launched are or really changes we’ll going large products our have requested from that that. that that some our rolled announcements are being specific products don’t get body healthy those are in and we out have the direction and to products, product that have to as to of year, and the our back throughout for lot think made we haven’t don’t strategic the of a really R&D countries see so,

Ivan Feinseth

again. and Okay, thank congratulations you

Jim Brown

you, Thank Ivan.

Doug Hekking

Ivan. Thanks,

Operator

to closing any would I And to Richards remarks. back call like now for or additional the Patrique turn

Patrique Richards

for for conference and thank call. your Well, your you questions today’s on participation

any remaining Thank at you. XXX-XXX-XXXX. to If Investor questions, feel have Relations you please free contact

Operator

you your concludes today’s this disconnect. And now And may conference. for participation. Thank you

USANA Health Sciences (USNA) 22 Apr 202020 Q1 Earnings call transcript