SALT LAKE CITY--(BUSINESS WIRE)--Sept. 21, 1999--
USANA Inc. (Nasdaq:USNA) Tuesday announced the restructuring of its European operations together with other cost savings primarily to be achieved through implementation of a new customer service software system.
The board of directors has approved a restructuring plan which proposes the sale of the USANA-owned facility in the United Kingdom. The company plans to service the U.K. and the Netherlands from a leased facility more appropriate for the present size of its European business.
Additional savings will be realized in USANA's North American operations primarily as a result of a new customer service software system to be implemented in the fourth quarter of 1999 and the first quarter of 2000. Certain legacy systems currently carried on the books at substantial value will be written off, reflecting pending obsolescence.
The combination of restructuring, reduced depreciation, and lower operating costs will save approximately $3.5 million per year (before tax).
USANA will record a $4.4 million one-time charge (before tax) in the third quarter of 1999, primarily reflecting the U.K. restructuring and the impairment of legacy systems. Third quarter revenues are anticipated to be approximately in line with expectations. The one-time charge will likely result in an estimated loss for the third quarter of between $0.07 and $0.08 per share.
"While we are reducing our staff and facilities in the UK," Myron W. Wentz, Ph.D., USANA chairman and chief executive, said, "we plan to maintain a European presence and to continue to grow our business there. We will adjust the scale of the operations as conditions demand."
"It is important to note that the gains in efficiency in the North American operations will be achieved through carefully managed attrition. New technology will allow us to provide the same high level of service to our customers," Wentz concluded.
The company said the announced organizational changes will not affect the previously announced launch into the Hong Kong market scheduled for the fourth quarter.
Separately, USANA announced today a 2.65-million share repurchase from its founder, Wentz.
USANA executives will hold a conference call with institutional investors on Wednesday, Sept. 22, 1999 at 9 a.m. EDT. The call will be broadcast over the Internet through Vcall at http://vcall.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download, and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will be available shortly after the call.
USANA Inc. develops and manufactures high quality nutritionals, personal care, and weight management products that are sold directly to preferred customers and distributors throughout the United States, Canada, Australia, New Zealand and the United Kingdom.
More information on USANA can be found at http://www.usana.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act.
Actual results could differ materially from those projected in the forward-looking statements, which involve a number of risks and uncertainties, including reliance upon the company's independent distributor network, government regulation of products, manufacturing and marketing, and risks associated with international expansion, and should be considered in conjunction with the cautionary statements contained in USANA's most recent filings with the Securities and Exchange Commission on Form 10-Q and 10-K.
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