USANA Health Sciences, Inc.

Hello and welcome to USANA Health Sciences third quarter earnings call. My name is Sarah and I will be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Andrew Masuda, to begin today's conference. Thank you.

Thank you and good morning, everyone. We appreciate you joining us to review our third quarter results. Today's conference call is being broadcast live via 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 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 2022, 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 by our CEO and Chairman of the Board, Kevin Guest, our President, Jim Brown, our Chief Financial Officer, Doug Hecking, as well as other executives. Yesterday, after market closed, we announced our third quarter results and posted our management commentary document on the company's website. We'll now hear brief remarks from Kevin before opening the call for questions.

Thank you, Andrew, and good morning, everyone. We appreciate you joining us. We reported yesterday that our third quarter operating results were... challenging than anticipated operating environment. COVID-related disruptions and increasing inflationary pressure on consumers were the primary factors that negatively affected our sales momentum and active customer accounts in many of our markets. As we look ahead, we anticipate continued COVID-related inflationary and economic challenges in many of our markets, which is reflected in our adjusted fiscal 2022 outlook. Despite the challenging environment, USADA remains a very healthy business. We generated $29 million U.S. of operating cash flow in the third quarter. We held a successful 30th anniversary convention in Salt Lake City and made meaningful progress to enhance our customer online shopping experience. We have the means, ability, and determination to put USADA back on a growth trajectory towards the Full Monty. We are taking action to implement several short-term initiatives to generate momentum in our business. These initiatives include new and modified incentives in various markets and regions and increase in targeted and relevant communications between our management team and associate leaders and accelerating our return to in-person meetings and events in markets where possible. We must always remember that we are in the people business, and the opportunity to build connectivity with our customers after several years of disruption will be invaluable to creating engagement and excitement in our business. Although we are committed to addressing the short-term challenges we are currently facing, the long-term health and growth of USANA remains our primary focus, and I remain confident that the successful execution of our strategic initiatives will position USANA to return to sustainable long-term growth. With that, I'll now ask the operator to please open the lines for questions.