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USANA Health Sciences(USNA) - 2025 Q3 - Quarterly Results

Preliminary Third Quarter 2025 Results Overview Summary of Financial Performance USANA reported preliminary Q3 2025 net sales of $214 million, but a net loss of ($6.5) million and diluted EPS of ($0.36), with a 471% effective tax rate Q3 2025 Preliminary Financial Highlights vs Q3 2024 | Metric | Q3 2025 Preliminary | Q3 2024 | Change (YoY) | | :------------------------ | :-------------------- | :-------------- | :----------- | | Net sales | $214 million | $200 million | +$14 million | | Earnings from operations | $1.2 million | $15.6 million | -$14.4 million | | Operating Margin | 0.6% | 7.8% | -7.2% pts | | Net (loss) earnings | ($6.5) million | $10.6 million | -$17.1 million | | Diluted EPS | ($0.36) | $0.56 | -$0.92 | | Effective income tax rate | 471% | 43% | +428% pts | | Adjusted Diluted EPS | ($0.15) | $0.56 | -$0.71 | | Adjusted EBITDA | $13.8 million | $24.6 million | -$10.8 million | - The effective income tax rate for Q3 2025 significantly increased to 471% from 43% in Q3 2024, primarily due to lower than expected earnings coupled with the concentration of operating and administrative expenses in the United States456 Management Commentary on Performance and Strategy Management noted Q3 operating results were below expectations due to softer sales and Brand Partner productivity, but remains confident in long-term strategy - Third quarter operating results came in below expectations, primarily due to softer-than-expected sales and Brand Partner productivity during the rollout of the enhanced Brand Partner compensation plan, and softer sales for Hiya due to lower customer acquisition rates2 - Despite short-term challenges, the enhanced compensation plan is viewed as a strategic move for long-term success, with encouraging Brand Partner response and recent pickup in sales activity. Hiya is still expected to generate double-digit sales growth for 202523 CFO's Commentary and Outlook CFO highlighted Q3 profitability challenges from softer sales and increased tax rate, expecting full-year sales at the lower end of outlook and EPS below range - Profitability challenges in Q3 included softer sales, meaningful investments in the enhanced Brand Partner compensation plan, and a disproportionate increase in the estimated annual effective income tax rate from 45% to 65% (471% for Q3 2025)4 - For the full year, sales are expected to be at or near the lower end of the previously issued outlook range, and earnings per share are expected to be below the range, starting from a lower base of active customer counts in Q4. The company plans to align costs with operating performance to achieve a meaningfully lower tax rate in future years5 Upcoming Earnings Release and Conference Call Final Q3 results are scheduled for release on October 21, 2025, with a conference call for analysts on October 22, 2025 - Final results for the third quarter are expected to be released after the close of market on Tuesday, October 21, 20257 - A conference call to discuss the announcement with analysts and institutional investors will be held on Wednesday, October 22, 2025, at 11:00 a.m. Eastern Time7 Non-GAAP Financial Measures Definition and Purpose This section defines non-GAAP measures like Adjusted EBITDA and Adjusted diluted EPS, used by management for internal assessment but not as GAAP substitutes - Adjusted EBITDA and Adjusted diluted EPS are non-GAAP financial measures used by management to internally reflect how the Company measures the business91015 - Non-GAAP financial measures have limitations, lack standardized meaning, and should not be considered in isolation from, or as a substitute for, GAAP financial information16 Reconciliation of Net (Loss) Earnings to Adjusted EBITDA This section provides a reconciliation of GAAP Net (loss) earnings to Adjusted EBITDA, detailing adjustments for taxes, interest, depreciation, amortization, and acquisition costs Reconciliation of Net (Loss) Earnings (GAAP) to Adjusted EBITDA (non-GAAP) (in thousands USD) | | Quarter Ended | | Nine Months Ended | | | --- | --- | --- | --- | --- | | | Q3 2025 | Q3 2024 | YTD Sep-25 | YTD Sep-24 | | | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | | Net (loss) earnings attributable to USANA (GAAP) | $ (6,522) | $ 10,607 | $ 12,535 | $ 37,576 | | Net (loss) earnings attributable to noncontrolling interest | (140) | - | 537 | - | | Net (loss) earnings | $ (6,662) | $ 10,607 | $ 13,072 | $ 37,576 | | Adjustments: | | | | | | Income taxes | 8,456 | 8,001 | 24,278 | 28,346 | | Interest (income) expense | (529) | (3,093) | (1,201) | (8,429) | | Depreciation and amortization | 5,112 | 5,559 | 16,050 | 16,345 | | Amortization of intangible assets - Hiya | 4,455 | - | 13,366 | - | | Earnings before interest, taxes, depreciation, and amortization (EBITDA) | 10,832 | 21,074 | 65,565 | 73,838 | | Add EBITDA adjustments: | | | | | | Non-cash share-based compensation | 3,576 | 3,542 | 10,078 | 10,945 | | Transaction, integration and transition costs - Hiya | 179 | - | 871 | - | | Inventory step-up - Hiya | - | - | 1,126 | - | | Consolidated adjusted EBITDA | 14,587 | 24,616 | 77,640 | 84,783 | | Less: Adjusted EBITDA attributable to noncontrolling interest | (804) | - | (3,604) | - | | Adjusted EBITDA attributable to USANA | $ 13,783 | $ 24,616 | $ 74,036 | $ 84,783 | Reconciliation of Diluted (Loss) Earnings Per Share to Adjusted Diluted (Loss) Earnings Per Share This section reconciles GAAP Diluted (Loss) EPS to Adjusted Diluted (Loss) EPS, detailing adjustments for Hiya acquisition costs, intangible asset amortization, and tax effects Reconciliation of Diluted (Loss) Earnings Per Share (GAAP) to Adjusted Diluted (Loss) Earnings Per Share (non-GAAP) (in thousands USD, except per share data) | | Quarter Ended | | | Nine Months Ended | | --- | --- | --- | --- | --- | | | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | | Net (loss) earnings attributable to USANA (GAAP) | $ (6,522) | $ 10,607 | $ 12,535 | $ 37,576 | | Earnings (loss) per common share - Diluted (GAAP) | $ (0.36) | $ 0.56 | $ 0.67 | $ 1.96 | | Weighted average common shares outstanding - Diluted | 18,293 | 19,083 | 18,671 | 19,181 | | Adjustment to net (loss) earnings: | | | | | | Transaction, integration and transition costs - Hiya | $ 179 | $ - | $ 871 | $ - | | Inventory step-up - Hiya | - | - | 1,126 | - | | Amortization of intangible assets - Hiya | 4,455 | - | 13,366 | - | | Adjustments to net (loss) earnings attributable to noncontrolling interest | (941) | - | (3,066) | - | | Income tax effect of adjustments to net (loss) earnings | - | - | (4) | - | | Adjusted net (loss) earnings attributable to USANA | $ (2,829) | $ 10,607 | $ 24,828 | $ 37,576 | | Adjusted (loss) earnings per common share - Diluted | $ (0.15) | $ 0.56 | $ 1.33 | $ 1.96 | | Weighted average common shares outstanding - Diluted | 18,293 | 19,083 | 18,671 | 19,181 | Company Information About USANA Health Sciences USANA develops and manufactures nutritional supplements and personal care products, sold directly, and holds a 78.8% stake in Hiya Health Products - USANA develops and manufactures high-quality nutritional supplements, functional foods, and personal care products, sold directly to Brand Partners and Preferred Customers in various global markets21 - USANA owns a 78.8% controlling ownership stake in Hiya Health Products, a children's health and wellness company21 Safe Harbor Statement This statement clarifies that the press release contains forward-looking statements subject to risks and uncertainties, including economic conditions and regulatory changes - The press release contains forward-looking statements based on current plans, expectations, estimates, forecasts, and projections, which involve a number of risks and uncertainties that could cause actual results to differ materially19 - Key risks include global economic conditions, reliance on independent Brand Partners, effectiveness of compensation plans, governmental regulation, geopolitical relations, data privacy, and the integration of the Hiya acquisition1920 Investor and Media Contacts Contact information for investor relations and media inquiries is provided - Investor Relations Contact: Andrew Masuda, (801) 954-7201, investor.relations@usanainc.com22 - Media Contact: Sarah Searle, (801) 954-7626, media@usanainc.com22