Usana Health Sciences Inc. has a market cap of $537.7 million; its shares were traded at around $35.66 with a P/E ratio of 11.3 and P/S ratio of 1. Usana Health Sciences Inc. had an annual average earning growth of 23.8% over the past 10 years.
Highlight of Business Operations:Asia Pacific: The increase in net sales in this region was the result of higher product sales volume due primarily to an increase in the average number of active Associates during the first nine months of 2011, compared with the same period in 2010. This increase came predominantly from Greater China, where growth was led by Hong Kong with a 36.8% increase in net sales during the first nine months of 2011, compared with the same period in 2010. Additionally, BabyCare added $14.0 million to net sales during the first nine months of 2011, in comparison with the prior year period, which included only partial third quarter 2010 results. Excluding BabyCare, local currency net sales in this region would have increased 17.6% for the first nine months of 2011, compared with the first nine months of 2010. Similar to North America, average spending per Associate increased in Asia Pacific due to our commission qualification changes.
We also experienced local currency sales growth of 102.1% in the Philippines, and 52.5% in South Korea. This growth is also primarily due to higher product sales volume from an increase in the average number of active Associates in these markets during the first nine months of 2011.
Gross profit increased to 82.3% of net sales for the first nine months of 2011 from 81.3% for the first nine months of 2010. This increase in gross profit can primarily be attributed to currency benefits received from our international subsidiaries, as the majority of our products sold are manufactured at our corporate headquarters in the United States and transferred to our international subsidiaries. The improvement in gross profit was partially offset by higher net freight costs on shipments to our customers.
Selling, general and administrative expenses increased to 23.6% of net sales for the first nine months of 2011, compared with 23.0% for the first nine months of 2010. This relative increase can primarily be attributed to the inclusion of BabyCares expenses in our operating results (BabyCare currently carries significantly higher relative selling, general and administrative expense as a percent of net sales than USANA). This increase was partially offset by leverage gained on increased sales outside the United States in markets where selling, general and administrative expenses are lower.
We typically generate positive cash flow due to our strong operating margins. During the first nine months of 2011, we had a net cash flow from operating activities of $53.5 million, compared with $46.2 million in the same period of 2010. The most significant factor of this change was the increase in net earnings.
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