USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal third quarter ended September 27, 2014. The Company also provided updated net sales and earnings guidance for 2014.
For the third quarter of 2014, net sales increased by 10.5% to $191.9 million, compared with $173.7 million in the prior-year period. The increase in net sales was driven by overall Associate growth of 18.8%, which was generated by the Companys Asia Pacific region.
Net earnings for the third quarter increased by 16.4% to $19.5 million, compared with $16.8 million during the prior-year period. This increase was driven by higher net sales and lower relative Associate Incentives expense. On a relative basis, Associate Incentives expense declined due to a $4.5 million one-time payout resulting from the pricing and compensation plan initiatives implemented by the Company in the third quarter of 2013. Earnings per share for the quarter increased by 26.7% to $1.47, compared with $1.16 in the third quarter of the prior year.
This increase in earnings per share was attributable to higher net earnings and a lower number of diluted shares outstanding due to the Companys share repurchases during 2014. Weighted average diluted shares outstanding were 13.3 million as of the end of the third quarter of 2014, compared with 14.4 million in the prior-year period.
Top and bottom line results for the third quarter benefitted from the recognition of $3.1 million of deferred revenue in Hong Kong. Earnings per share for the quarter benefitted by $0.11 as a result of this revenue recognition.
During the quarter, the Company repurchased approximately 1.1 million shares under its authorized repurchase program for a total investment of $76.6 million. Additionally, as of October 24, 2014, the Company has subsequently invested $13.2 million to repurchase approximately 172,000 shares pursuant to a Rule 10b5-1 plan. As of October 24, 2014, there were $61.2 million remaining under the current share repurchase authorization. The Company ended the third quarter with approximately $87.7 million in cash and cash equivalents and $10 million on its revolving line of credit.
USANA generated solid operating results in the third quarter, which included double-digit sales, earnings and customer growth, said Kevin Guest, USANAs President. We also continued to see impressive growth in world-wide unit volume, Auto Order sales and check earners. This growth was driven by the pricing and compensation plan enhancements we made a year ago and our management teams continued promotion of those enhancements during 2014. While we are pleased with the growth in each of these metrics, customer growth continues to be our highest priority, as we seek to improve the overall health and nutrition of individuals and families around the world.
Net sales in the Asia Pacific region increased by 21.3% to $130.2 million, compared with $107.4 million for the third quarter of the prior year, and increased 4.5% sequentially. The year-over-year increase was due to 29.2% sales growth in the Greater China region and 10.6% sales growth in the Southeast Asia Pacific region.
Sales growth in Greater China was driven by double-digit sales and customer growth in Mainland China, while sales growth in Southeast Asia Pacific resulted from strong sales and customer growth in Australia/New Zealand, the Philippines and Thailand. The number of active Associates in the Asia Pacific region increased by 28.2% year-over-year, due primarily to double-digit Associate growth in the Greater China and Southeast Asia Pacific regions.
Net sales in the Americas/Europe region declined 6.9% to $61.7 million, due primarily to a sales decline in the U.S., which was partially offset by net sales growth in other markets in the region. The number of active Associates in this region declined slightly compared to the prior-year period.