Nutritional products company USANA Health Sciences reports Q4 net earnings of US$20.3M, down from US$39.6M in 2021 on net sales of US$267M, down from US$310M last year; in Americas and Europe region, net sales down by 11% and active customers down by 9%

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SALT LAKE CITY, Utah , February 9, 2022 (press release) –

USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its full year and fiscal fourth quarter ended January 1, 2022.

Key Financial & Operating Highlights

  • Fiscal year 2021 net sales grew 5% to $1.186 billion.
  • Reported fiscal year 2021 diluted EPS totaled $5.73.
  • Fourth quarter net sales reached $267 million and diluted EPS were $1.03.
  • Company provides initial 2022 net sales guidance of $1.125 to $1.225 billion and initial diluted EPS guidance of $5.25 to $6.00.

The Company maintains a 52/53-week fiscal year. Fiscal 2020 was a 53-week year and included one additional week of sales in the fourth quarter.

FY 2021 Financial Performance

Consolidated Results

Net Sales

$1.186 billion

  • +5% vs prior year
  • +$53.6 million YOY FX impact, or +5%
  • FY 2020 additional week of sales contributed approximately $18 million to prior year results

Diluted EPS

$5.73

  • -2% vs prior year
  • 20.3 million diluted shares, -4% vs prior year
  • FY 2020 additional week of sales contributed an estimated $0.17 to prior year results

Active Customers

560,000

  • -7% vs. prior year

 

“USANA delivered year-over-year net sales growth for 2021, despite a challenging year-over-year comparable and a global operating environment that disrupted many of our growth initiatives and planned events,” said Kevin Guest, Chief Executive Officer and Chairman of the Board. “Importantly, we made meaningful progress during the year in executing our digital transformation strategy, which is key to improving our overall customer experience and setting the stage for future net sales growth.”

Q4 2021 Financial Performance

Consolidated Results

Net Sales

$267.3 million

  • -14% vs. prior-year quarter
  • +$1.9 million YOY FX impact, or +1%
  • Q4 2020 additional week of sales contributed approximately $18 million to prior year results

Diluted EPS

$1.03

  • -45% vs. prior-year quarter
  • Diluted shares of 19.7 million, -7%
  • Q4 2020 additional week of sales contributed an estimated $0.17 per share to prior year results

Mr. Guest added, “Fourth quarter net sales came in below our expectations as our business was negatively impacted in several key Asia Pacific markets where COVID-19 restrictions persisted throughout the quarter. Additionally, lower gross margin and the unanticipated timing of certain marketing expenses resulted in lower-than-expected diluted earnings per share. We estimate that these collective events negatively impacted diluted earnings per share by $0.18.”

Q4 2021 Regional Results:

Asia Pacific Region

Net Sales

$212.1 million

  • -15% vs. prior-year quarter
  • 79% of consolidated net sales

Active Customers

428,000

  • -6% vs. prior-year quarter
  • -3% sequentially

Asia Pacific Sub-Regions

Greater China

Net Sales

$125.8 million

  • -10% vs. prior-year quarter
  • Constant currency net sales: -13%

Active Customers

255,000

  • +1% vs. prior-year quarter
  • +4% sequentially

North Asia

Net Sales

$29.2 million

  • -11% vs. prior-year quarter
  • Constant currency net sales: -6%

Active Customers

58,000

  • -3% vs. prior-year quarter
  • -8% sequentially

Southeast Asia Pacific

Net Sales

$57.0 million

  • -26% vs. prior-year quarter
  • No meaningful FX impact

Active Customers

115,000

  • -19% vs. prior-year quarter
  • -14% sequentially

Americas and Europe Region

Net Sales

$55.2 million

  • -11% vs. prior-year quarter
  • No meaningful FX impact
  • 21% of consolidated net sales

Active Customers

132,000

  • -9% vs. prior-year quarter
  • -1% sequentially

 

Balance Sheet and Share Repurchase Activity

The Company ended the year with $240 million in cash and cash equivalents and no debt after repurchasing 296,000 shares for $28.9 million during the fourth quarter. Diluted shares outstanding totaled 19.7 million for the fourth quarter. As of January 1, 2022, the Company had approximately $108 million remaining under the share repurchase authorization.

Fiscal 2022 Outlook

Mr. Guest continued, “Growth in Active Customers and net sales in each of our regions around the world remain top priorities in 2022. This focus reflects our commitment to all stakeholders and to our vision of improving the health and wellness of as many people around the world as possible. Fiscal 2022 is also USANA’s 30th year anniversary, and we have several exciting events, product launches, and announcements planned to celebrate our legacy and drive growth. In connection with our anniversary, we hope to return to live events in markets where we are permitted to do so. We believe that live events are both important and additive to driving excitement and momentum within our sales force. During the year, we will continue investing in technology and digital tools to further improve our overall customer experience. We will continue to lay the foundations for expansion into new markets and pursue accretive business development opportunities. We look forward to growing the number of individuals and families using our products and to delivering growth for USANA in 2022.”

The Company is introducing net sales and earnings per share outlook for fiscal year 2022, as detailed in the table below:

Fiscal Year 2022 Outlook

 

 

Range

Consolidated Net Sales

$1.125 - $1.225 billion

Diluted EPS

$5.25 - $6.00

 

Doug Hekking, Chief Financial Officer, commented, “We are providing our initial outlook for fiscal 2022, which reflects a wider-than-normal range due to continued uncertainty surrounding the COVID-19 environment. Some of our markets continue to experience meaningful lockdown restrictions while others are operating in a more normalized environment. Our outlook anticipates that net sales will accelerate throughout the year. It also assumes a modestly unfavorable foreign currency environment, increased costs due to inflationary pressures, and increased travel and event-related costs in select markets. Additionally, we project an effective tax rate of 32.5% for the year and a diluted share count of 19.6 million.”

Management Commentary Document and Conference Call

For more information on the USANA’s operating results, please see the Management Commentary document, which has been posted on the Company’s website (http://ir.usana.com) under the Investor Relations section. USANA’s management team will hold a conference call and webcast to discuss today’s announcement with investors on Wednesday, February 9, 2022 at 11:00 AM Eastern Time. Investors may listen to the call by accessing USANA’s website at http://ir.usana.com. The call will consist of brief opening remarks by the Company’s management team, followed by a question and answer session.

Non-GAAP Financial Measures

The Company prepares its financial statements using U.S. generally accepted accounting principles (“GAAP”). Constant currency net sales, earnings, EPS and other currency-related financial information (collectively, “Financial Results”) are non-GAAP financial measures that remove the impact of fluctuations in foreign-currency exchange rates (“FX”) and help facilitate period-to-period comparisons of the Company’s Financial Results that we believe provide investors an additional perspective on trends and underlying business results. Constant currency Financial Results are calculated by translating the current period's Financial Results at the same average exchange rates in effect during the applicable prior-year period and then comparing this amount to the prior-year period's Financial Results.

About USANA

USANA develops and manufactures high-quality nutritional supplements, functional foods and personal care products that are sold directly to Associates and Preferred Customers throughout the United States, Canada, Australia, New Zealand, Hong Kong, China, Japan, Taiwan, South Korea, Singapore, Mexico, Malaysia, the Philippines, the Netherlands, the United Kingdom, Thailand, France, Belgium, Colombia, Indonesia, Germany, Spain, Romania, and Italy. More information on USANA can be found at www.usana.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. Our actual results could differ materially from those projected in these forward-looking statements, which involve a number of risks and uncertainties, including: uncertainty related to the magnitude, scope and duration of the impact of the COVID-19 pandemic (“COVID-19”) to our business, operations and financial results; the further spread of, and regulatory measures or voluntary actions that may be put in place to limit the spread of, COVID-19 in the markets where we operate, including restrictions on business operations, shelter at home, or social distancing requirements; the potential for a resurgence of COVID-19 spread in any of our markets in the future; the impact of COVID-19 on the domestic and world economies, including any negative impact on discretionary spending, consumer demand, and consumer behavior in general; regulatory risk in China in connection with the health products and direct selling business models; regulatory risk in the United States in connection with the direct selling business model; potential negative effects of deteriorating foreign and/or trade relations between the United States and China; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material failures of our information technology systems; global economic conditions generally; reliance upon our network of independent Associates; risk associated with governmental regulation of our products, manufacturing and direct selling business model; adverse publicity risks globally; risks associated with our international expansion and operations; and uncertainty relating to the fluctuation in U.S. and other international currencies. 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. The forward-looking statements in this press release set forth our beliefs as of the date hereof. We do not undertake any obligation to update any forward-looking statement after the date hereof or to conform such statements to actual results or changes in the Company’s expectations, except as required by law.

USANA Health Sciences, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

                 
   

Quarter Ended

 

Twelve Months Ended

   

1-Jan-22

 

2-Jan-21

 

1-Jan-22

 

2-Jan-21

                 
Net sales  

$

267,299

 

$

310,521

 

$

1,186,464

 

$

1,134,644

Cost of sales  

 

52,518

 

 

59,020

 

 

217,898

 

 

209,111

Gross profit  

 

214,781

 

 

251,501

 

 

968,566

 

 

925,533

Operating expenses:                
Associate incentives  

 

114,687

 

 

129,791

 

 

519,267

 

 

487,856

Selling, general and administrative  

 

68,589

 

 

69,172

 

 

279,107

 

 

261,186

Earnings from operations  

 

31,505

 

 

52,538

 

 

170,192

 

 

176,491

Other income (expense), net  

 

141

 

 

1,993

 

 

450

 

 

1,457

Earnings before income taxes  

 

31,646

 

 

54,531

 

 

170,642

 

 

177,948

Income taxes  

 

11,326

 

 

14,902

 

 

54,137

 

 

53,284

NET EARNINGS  

$

20,320

 

$

39,629

 

$

116,505

 

$

124,664

                 
                 
Earnings per share - diluted  

$

1.03

 

$

1.87

 

$

5.73

 

$

5.86

Weighted average shares outstanding - diluted  

 

19,673

 

 

21,189

 

 

20,343

 

 

21,256

                 

USANA Health Sciences, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

As of

 

As of

 

 

1-Jan-22

 

2-Jan-21

ASSETS        
Current Assets        
Cash and cash equivalents  

$

239,832

 

$

311,917

Inventories  

 

98,318

 

 

90,224

Prepaid expenses and other current assets  

 

26,967

 

 

23,145

Total current assets  

 

365,117

 

 

425,286

         
Property and equipment, net  

 

101,780

 

 

100,445

Goodwill  

 

17,668

 

 

17,367

Intangible assets, net  

 

30,442

 

 

30,796

Deferred tax assets  

 

4,839

 

 

4,640

Other assets  

 

57,894

 

 

62,353

Total assets  

$

577,740

 

$

640,887

         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current Liabilities        
Accounts payable  

$

13,508

 

$

18,195

Other current liabilities  

 

147,282

 

 

149,878

Total current liabilities  

 

160,790

 

 

168,073

         
Deferred tax liabilities  

 

7,497

 

 

12,009

Other long-term liabilities  

 

14,329

 

 

19,155

         
Stockholders' equity  

 

395,124

 

 

441,650

Total liabilities and stockholders' equity  

$

577,740

 

$

640,887

             
USANA Health Sciences, Inc.

Sales by Region

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

 

 

 

 

 

 

January 1, 2022

 

January 2, 2021

 

Change from prior year

 

Currency
impact on

sales

 

%
change
excluding
currency
impact

Asia Pacific                                
Greater China  

$

125,840

 

47.1

%

 

$

139,059

 

44.8

%

 

$

(13,219

)

 

(9.5

%)

 

$

4,126

 

 

(12.5

%)

Southeast Asia Pacific  

 

56,984

 

21.3

%

 

 

76,861

 

24.7

%

 

 

(19,877

)

 

(25.9

%)

 

 

(1,036

)

 

(24.5

%)

North Asia  

 

29,249

 

10.9

%

 

 

32,892

 

10.6

%

 

 

(3,643

)

 

(11.1

%)

 

 

(1,612

)

 

(6.2

%)

Asia Pacific Total  

 

212,073

 

79.3

%

 

 

248,812

 

80.1

%

 

 

(36,739

)

 

(14.8

%)

 

 

1,478

 

 

(15.4

%)

                                 
Americas and Europe  

 

55,226

 

20.7

%

 

 

61,709

 

19.9

%

 

 

(6,483

)

 

(10.5

%)

 

 

471

 

 

(11.3

%)

   

$

267,299

 

100.0

%

 

$

310,521

 

100.0

%

 

$

(43,222

)

 

(13.9

%)

 

$

1,949

 

 

(14.5

%)

                                 
                                 
   

Twelve Months Ended

 

 

 

 

 

 

 

 

   

January 1, 2022

 

January 2, 2021

 

Change from prior year

 

Currency
impact on
sales

 

%
change
excluding
currency
impact

Asia Pacific                                
Greater China  

$

563,469

 

47.5

%

 

$

530,505

 

46.7

%

 

$

32,964

 

 

6.2

%

 

$

34,781

 

 

(0.3

%)

Southeast Asia Pacific  

 

269,803

 

22.7

%

 

 

269,555

 

23.8

%

 

 

248

 

 

0.1

%

 

 

8,381

 

 

(3.0

%)

North Asia  

 

129,920

 

11.0

%

 

 

114,964

 

10.1

%

 

 

14,956

 

 

13.0

%

 

 

3,917

 

 

9.6

%

Asia Pacific Total  

 

963,192

 

81.2

%

 

 

915,024

 

80.6

%

 

 

48,168

 

 

5.3

%

 

 

47,079

 

 

0.1

%

                                 
Americas and Europe  

 

223,272

 

18.8

%

 

 

219,620

 

19.4

%

 

 

3,652

 

 

1.7

%

 

 

6,555

 

 

(1.3

%)

   

$

1,186,464

 

100.0

%

 

$

1,134,644

 

100.0

%

 

$

51,820

 

 

4.6

%

 

$

53,634

 

 

(0.2

%)

                                                     
Active Associates by Region(1)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

January 1, 2022

 

January 2, 2021

Asia Pacific                
Greater China  

81,000

 

31.9

%

 

88,000

 

29.4

%

Southeast Asia Pacific  

78,000

 

30.7

%

 

103,000

 

34.5

%

North Asia  

37,000

 

14.6

%

 

39,000

 

13.0

%

Asia Pacific Total  

196,000

 

77.2

%

 

230,000

 

76.9

%

                 
Americas and Europe  

58,000

 

22.8

%

 

69,000

 

23.1

%

   

254,000

 

100.0

%

 

299,000

 

100.0

%

                     

Active Preferred Customers by Region (2)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

January 1, 2022

 

January 2, 2021

Asia Pacific                
Greater China  

174,000

 

56.8

%

 

164,000

 

54.7

%

Southeast Asia Pacific  

37,000

 

12.1

%

 

39,000

 

13.0

%

North Asia  

21,000

 

6.9

%

 

21,000

 

7.0

%

Asia Pacific Total  

232,000

 

75.8

%

 

224,000

 

74.7

%

                 
Americas and Europe  

74,000

 

24.2

%

 

76,000

 

25.3

%

   

306,000

 

100.0

%

 

300,000

 

100.0

%

(1) Associates are independent distributors of our products who also purchase our products for their personal use. We only count as active those Associates who have purchased from us any time during the most recent three-month period, either for personal use or resale.
(2) Preferred Customers purchase our products strictly for their personal use and are not permitted to resell or to distribute the products. We only count as active those Preferred Customers who have purchased from us any time during the most recent three-month period. China utilizes a Preferred Customer program that has been implemented specifically for that market.

 

Investor contact:
Patrique Richards
Investor Relations
(801) 954-7961
investor.relations@usanainc.com

Media contact:
Dan Macuga
Public Relations
(801) 954-7280

Source: USANA Health Sciences, Inc.

Released February 8, 2022

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