USANA Health Sciences, Inc.

Good day and welcome to the USANA Health Sciences second quarter conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Patrick Richards, Executive Director of Investor Relations and Business Development. Please go ahead, sir.

Thank you and good morning. We appreciate you all joining us this morning to discuss our second quarter. Today's conference call is being broadcast live by webcast and can be accessed directly from our website at ir.usana.com. As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the 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 filings with the SEC. I'm joined this morning by our CEO and Chairman of the Board, Kevin Guest, President Jim Brown, Our Chief Financial Officer, Doug Hekking, as well as other executives. Yesterday after the market closed, we announced our second quarter results and posted our management commentary results and outlook document on the company's website. We'll now hear brief remarks from Kevin before opening the call for questions.

Good morning, and thank you for joining us to review our second quarter. Over these past several months, we've proven to be nimble and adaptive, and our results reflect these efforts. Our employees have adjusted quickly to working from home and are providing our customers with the same great customer experience and level of service they have come to expect. We've also remained committed to executing on our many growth initiatives and continue to focus on the long-term growth of USANA. Not surprisingly, our associates are extremely resourceful. They are leveraging social media and other technology-based tools provided by USANA to reach more customers who are looking for high-quality health and wellness products such as ours. We also deployed several successful promotions during the quarter. These promotions help generate additional momentum and customer growth that we expect to continue in the back half of the year. We also successfully hosted our first all-virtual Asia Pacific Convention. Each year, we host several live events that are well-attended and a large part of the camaraderie and culture of USANA. While we are disappointed to break the tradition this year, we were pleased with the attendance of the event and have received positive feedback from attendees. While we look forward to resuming live events in the future, we are making the most of our virtual events in 2020 and leveraging the repurposed resources to reach an even larger audience. Before opening the call for questions, I'll comment briefly on our expectations and outlook for the back half of the year. While we recognize that we cannot anticipate all of the challenges that might arise as a result of the ongoing COVID-19 pandemic, we believe we've positioned ourselves well to continue adapting to an evolving operating environment. The health, wellness, and safety of our employees, associates, and customers around the world remain our top priorities. and our operating plan will continue to reflect those priorities. Accordingly, many of our employees will continue to work from home and our manufacturing and shipping employees will continue to work under our new operating procedures for the foreseeable future. As noted in our earnings release, we are raising our full year guidance to reflect a solid second quarter as well as the current momentum in the business. We plan on an increased cadence of promotions and incentives to support this momentum particularly in the third quarter. We continue to manage our cost structure to align with sales performance and to ensure our financial flexibility to adapt to a changing environment. Additionally, we will continue investing in our long-term growth strategies. Overall, I am confident and the strength that USADA's underlying business and the growth strategies we have in place for the remainder of 2020 and beyond. With that, I'll now ask the operator to please open the lines for questions.