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USANA Health Sciences Inc (USNA)
Q4 2009 Earnings Call
February 10, 2010 11:00 AM ET
Riley Timmer - Vice President of Finance
Fred Cooper - President & Chief Operating Officer
Jeff Yates - Chief Financial Officer
Mark Wilson - Executive Vice President, Sales.
Tim Ramey - D.A. Davidson
Per Osland [ph] - Jefferies & Co
Scott Van Winkle - Canaccord Adams
Rommel Dionisio - Wedbush Morgan
Mimi Noel - Sidoti & Co
Previous Statements by USNA
» USANA Health Sciences Inc. Q3 2009 Earnings Call Transcript
» USANA Health Sciences Q2 2009 Earnings Transcript
» USANA Health Sciences, Inc. Q1 2009 Earnings Call Transcript
I will now hand the conference over to Mr. Riley Timmer, please go ahead.
Thank you, good morning everyone. We appreciate you joining us this morning to review our fourth quarter and full year 2009 results. Today’s conference call is being broadcast live via webcast and can be accessed directly from our website at www.usanahealthsciences.com.
Surely following the call, a replay will be available on our website. As a reminder, during the course of this conference call management will make forward-looking statements regarding future events for the future financial performance of our company.
Those statements involve risks and uncertainties that could cause our actual results to differ perhaps materially from the results projected in such forward-looking statements. We caution you that these statements should be considered in conjunction with the disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC.
Okay, today I'm joined this morning by Dr. Fred Cooper, our President and Chief Operating Officer; Jeff Yates, our Chief Financial Officer; and Mark Wilson, our Executive Vice President of Sales.
Before I turn the call over to Jeff I'm going to point out a few areas of importance that are salient to our results this quarter. First 2008 included an extra week of sales due to the way our accounting year end is structured.
This occurs about every 5 to 6 years and 2008 happened to be one of those 53-week years. Please keep this extra week in mind as we make comparisons to the fourth quarter and full year 2008 as we had nearly $7 million of additional sales that week.
Also for the full year 2009 sales were reduced by approximately $17.1 million and earnings per share was reduced by about $0.10 due to the unfavorable currency changes. However, for the first time in 2009, the fourth quarter included a benefit from changes in currency exchange rate.
This benefit amounted to $6.5 million to our top line year-over-year. Additionally the fourth quarter of 2008 reflected about $7 million in non-recurring expense, which is loaded in the SG&A line. This equated to an EPS reduction of about $0.27.
With that I’ll turn the call over to Jeff to provide you with financial results of the quarter and year.
Jeffrey A. Yates
Good morning everyone, I am delighted to be here with Fred and Mark again to talk about another great quarter for USANA. I’ll begin by reviewing the details of the income statement and balance sheet and then introduce our initial guidance for 2010.
For the fourth quarter of 2009 net sales reached a record $116.8 million compared with a $111 million reported for the fourth quarter of 2008. As Riley pointed out, the fourth quarter of 2009 was a 13-week quarter compared to a 14 week fourth quarter in the prior year. Excluding this extra week of sales, net sales increased 12.2%.
For the full year 2009, net sales increased 1.8% to $436.9 million, which marks the seventh consecutive year of record sales for USANA. It is also relevant to note that we achieved this new record despite a $17.1 million negative impact to the top line from changes in currency and an extra week in sales in 2008.
Excluding these two factors, sales in 2009 would have increased by 7.6% over the prior year. This growth was due to an overall increase in product sales driven by higher average number of active associates.
Looking at our regional sales results, net sales for the fourth quarter in North America decreased by 9.3% or $6.2 million to $60.8 million compared with the prior year. Again excluding the extra week of sales in 2008, net sales in North America decreased just 3.5%.
This decrease was primarily due to a 9.3% decrease in the number of active associates in that market to 97,000. In a moment, Fred will discuss in greater detail our results and strategies for North America.
Needless to say, we are pleased with the overall performance in our Asia Pacific region. During the fourth quarter, net sales increased $11.9 million or 27.1%. This increase resulted in a record $56 million in sales driven primarily by an increase of 12.1% in the number of active associates to a 102,000.
This is the third consecutive quarter of record sales and number of associates for this region. This increase can be primarily attributed to growth in Hong Kong and the addition of 4,000 new associates in the Philippines.
We continue to achieve double-digit sales growth in Hong Kong, Malaysia and South Korea and this quarter we achieved double-digit growth in Australia, New Zealand and Japan. The addition of the Philippines, USANA’s newest market, added $1.3 million in sales to our Asia Pacific total for the quarter.