USANA Reports Record Revenue Of $233.2 Million + 23.9%

 

USANA Health Sciences, Inc. (NYSE: USNA) today announced record financial results for its fiscal second quarter ended July 4, 2015. The Company also increased its financial outlook for 2015.

Financial Performance

• Second quarter net sales increased 23.9% to $233.2 million
• Second quarter EPS increased 41.2% to $1.92
• Number of active Associates increased 40.3% to 397,000

For the second quarter of 2015, net sales increased to $233.2 million, up 23.9% compared with $188.3 million in the prior-year period. The increase in net sales was driven by 40.3% growth in the number of active Associates and 15.2% growth in the number of Preferred Customers. Also included in net sales for the quarter is $5 million in revenue that was deferred during the previous quarter in connection with price increases in China. Fluctuations in currency exchange rates negatively impacted net sales by $9.7 million due to the strengthening of the U.S. dollar.

Net earnings for the second quarter increased by 31.7% to $25.4 million, compared with $19.3 million during the prior-year period. The increase in net earnings was driven by higher net sales, improved gross margins and lower relative selling, general and administrative expense, which were partially offset by higher relative Associate Incentives expense.

Earnings per diluted share for the second quarter increased 41.2% to $1.92, compared with $1.36 in the prior year period. The increase in earnings per share was attributable to higher net earnings and a lower number of diluted shares outstanding due to the Company’s share repurchases during 2014. Weighted average diluted shares outstanding were 13.2 million as of the end of the second quarter of 2015, compared with 14.2 million in the prior-year period. During the second quarter of 2015, the Company did not repurchase any shares of common stock.

The Company ended the second quarter with $150.9 million in cash and cash equivalents, zero debt and $61.2 million remaining under the current share repurchase authorization.

“USANA generated exceptional results during the second quarter, which again included double-digit growth in sales, earnings and customers,” said Kevin Guest, USANA’s President. “Our better-than-expected results reflect the strong momentum we are seeing in our business, which is largely being driven by our strategies for customer growth.”

Regional Results

Net sales in the Asia Pacific region increased by 35.4% to $168.7 million, compared with $124.6 million for the second quarter of the prior year. Sales grew 51.6% in the Greater China region, 7.8% in the Southeast Asia Pacific region and 32.4% in the North Asia region. Sales growth in Greater China was driven by strong customer growth in Mainland China, while growth in Southeast Asia Pacific resulted from customer growth within each market in the region. Finally, sales growth in North Asia was driven by double-digit customer growth in South Korea.

The number of active Associates in the Asia Pacific region increased by 53.2% year-over-year, and increased 6.2% sequentially. Net sales in the Asia Pacific region were negatively impacted by $5.1 million due to the strengthening of the U.S. dollar.

Net sales in the Americas/Europe region increased modestly to $64.5 million and were negatively impacted by $4.6 million due to the strengthening of the U.S. dollar. Canada, Mexico and Colombia all generated double-digit customer growth in the second quarter, compared with the prior year period.

“Although currency remains a headwind, our business continues to generate solid worldwide growth,” continued Guest. “While Mainland China continues to lead the way, it is noteworthy that USANA generated both sales and customer growth in nearly every market around the world, which reflects the demand for our best-in-class products and business opportunity. During the quarter, we held our annual Asia Pacific convention in Singapore, where thousands of our Associates celebrated their success and received additional training. Later this month, we will hold our annual International Convention in Salt Lake City, where we also expect record attendance and another amazing event.”