USANA Health Sciences, Inc.

Welcome to the USANA Health Sciences First Quarter Conference Call. Today's conference is being recorded, and at this time I would like to turn the conference over to Mr. Patrick Richards, Executive Director of Investor Relations and Business Development. Please go ahead.

Good morning. We appreciate you joining us this morning to review our first quarter. Today's conference call is being broadcast live on a webcast and can be accessed directly from our website at ir.usana.com. Shortly 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 or future financial performance of our company. Those statements involve risks and uncertainties that could cause actual results to differ, perhaps materially, from the results projected in such forward-looking statements. Examples of these statements include those regarding our strategies and outlook for fiscal year 2020. as well as uncertainty related to the magnitude, scope, and duration of the impact of the COVID-19 pandemic to our business, operations, and financial results. We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent violence with the SEC. Although our CEO, Kevin Guest, is unable to attend the call this morning, I'm joined by our President, Jim Brown, our Chief Financial Officer, Doug Hekking, as well as other executives. To begin, we'd like to point out that the majority of Nissan employees on the call have dialed in remotely from their respective homes. In early February, we successfully implemented a work-from-home plan for our non-manufacturing and non-distribution employees in our home office and around the world and expect to follow this plan until further notice. Yesterday, after the market closed, we announced our first quarter results Good morning and thank you for joining us. The past couple of months have been a whirlwind for all of us, marked by disruptions and challenges in our personal lives and business operations. But the time here at USANA has also been filled with moments that make us proud to be part of this company. We've asked a lot of our employees and associates around the world. and they responded quickly and professionally to solve real-time challenges as we've had to make adjustments in nearly every aspect of our business. For example, you saw an employee in the Philippines move their shipping facility to a new building overnight in order to keep deliveries on time. Our call center shifted to working from home in just two days and our leadership team comes together each day to overcome new challenges and continue planning for the future. Before opening the call up for questions, I'd like to address a few key areas of the business that have been affected by COVID-19. First, our global manufacturing and distribution have remained fully operational. We continue to manufacture products and ship orders to homes around the world. As always, manufacturing is taking place in an exceptionally clean facility using good manufacturing practices to maintain our high-quality standards. including masks, temperature checks, and physical distancing to keep our employees safe. Second, we continue to actively manage our supply chain and address challenges as they arise. As our first quarter results indicate, we have continued to experience high demand for our high-quality health products. Generally, we have ample inventory in all of our markets, and our operations teams have quickly addressed any temporary backlog orders. It's important that we continue to provide support to our associates at a time when many potential customers are searching for ways to improve their nutrition. We're holding frequent trainings to ensure that our associates are familiar with our online sales tools and resources. And importantly, our associates and customers continue to receive the same great customer service in every market, whether that's via phone, email, WhatsApp, or Line. Fourth, our research and development team is We are working to deliver content to associates and customer homes that we hope will be as engaging and motivating as our in-person events. Although we can't know with certainty what the next few months will bring, We will continue to adapt and do everything we can to keep USANA on track. I am confident in the strength of USANA's underlying business and believe that as we navigate through these unprecedented events with a long-term mindset, USANA's business will be stronger than it was before. With that, I'll now ask the operator to please open the line for questions.

Thank you. And if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. Again, that is star one to ask a question. And we will take our first question from Steph Leesink with Jefferies. Go ahead.