USANA Health Sciences Q2 2009 Earnings Transcript

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2009-07-29 19:19:22.0

Tags: Distributor, Cooper, Sales Strategy, Recruitment & Selection, Sales Force Management, Sales, Human Resources, Workforce Management, Seeking Alpha, USANA Health Sciences Inc.

Question-and-Answer Session

Operator

Thank you, sir. We will now begin the question-and-answer session. (Operator Instructions). And our first question comes from the line of Tim Ramey with D.A. Davidson. Please go ahead.

Timothy Ramey - D.A. Davidson

Good morning, guys. Congratulations on some good results.

Jeff Yates

Thank you, Tim.

Fred Cooper, Ph.D.

Thank you.

Timothy Ramey - D.A. Davidson

I guess to congratulate you and then take a little shot. We call down guidance just I guess 90 days ago and that makes me worry about your level of visibility as a business. Can you talk a little bit about your visibility and whether we should just be taking guidance with the grand result at this point or whether there was, I do know of course with the currency change quite a bit during the quarter and that probably had a meaningful contributing effect. Could you discuss that a little bit?

Jeff Yates

Of course, Tim. Thank you for the questions. I think you nailed it. Currency is a significant factor and played well into the guidance that we provided in the first quarter, needless to say we've had a nice improvement sequentially from Q1 to Q2, we're reflecting that but given those fluctuations its hard to predict what's going to happen in Q3 and Q4 and we've tried to take that into consideration. But we've also had a nice growth in our associate counts and that reflects the impact of that going forward.

Timothy Ramey - D.A. Davidson

Thanks for that. And would you expect the associate growth to start to more closely or sorry, say it the other way. Sales growth to more start -- start to more closely near the associate growth. In the years past, they were a pretty good mirror of each other but there has been some disconnect here recently.

Fred Cooper, Ph.D.

This is Fred and yes. We would expect that those two numbers will align better going forward.

Timothy Ramey - D.A. Davidson

Thanks so much guys.

Fred Cooper, Ph.D.

Yes.

Operator

Thank you. (Operator Instructions). And your next question comes from the line of Scott Van Winkle with Canaccord Adams. Please go ahead.

Scott Winkle - Canaccord Adams

Hey guys. Congratulations as well.

Jeff Yates

Thank you, Scott. Welcome.

Scott Winkle - Canaccord Adams

Okay. First question, on distributors, and I don't know how you answer this because it's not a metric, you do know the path. How much of the distributor growth sequential, was new distributors coming in, rather than, and here's my thinking, my thinking is that some distributors just didn't purchase in the first quarter because of the economy, and I would assume that some of those people have become active again, are back in the second quarter, and that drove a good chunk of that distributor total at the end of the quarter and I think you see where I'm going with this, is how much of it was kind of new distributors, new to the system, driven by recruiting that we kind of see that momentum and new distributors continue to work? How much of it was kind of a catch up from the first quarter, may people just kind of sat on their hands.

 

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