Patrique Richards - Investor Relations Kevin Guest - Chief Executive Officer Jim Brown - President and COO Doug Hekking - Chief Financial Officer.

Frank Camma - Sidoti Douglas M. Lane - Lane Research.

Presentation:.

Please standby, we are about to begin. Good day. And welcome to the USANA Health Sciences First Quarter Conference Call. Today’s call is being recorded. At this time, I’d like to turn the conference over to Patrique Richards. Please go ahead, sir..

Good morning, everyone. We appreciate you joining us this morning to review our first 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 our outlook for fiscal year 2018.

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 am joined this morning by our CEO, Kevin Guest; President and Chief Operating Officer, Jim Brown; and our Chief Financial Officer, Doug Hekking; as well as other executives here in the room with us.

Yesterday, after the market closed, we announced our first quarter results and posted our Management Commentary, Results and Outlook document on the company's website. Before opening the call for questions, we'll first hear brief remarks from Kevin..

Thanks, Patrique. Good morning and thank you for joining us to review our first quarter results. We are very pleased to report another quarter of excellent results for USANA. This is exactly how we plan to start the year. The launch of Celavive was certainly the highlight of the quarter for us.

We systematically launched this product line around the world, beginning with Australia, New Zealand, Malaysia and Singapore in January, followed by the United States, Canada and other markets throughout the remainder of the quarter.

Our data which includes unit volume, customer feedback and sequential quarter preferred customer growth suggests that Celavive has been well-received by our customer base. The sequential quarter preferred customer growth is particularly important to us as one of our 2018 initiatives in growing our preferred customer base around the world.

Keep in mind that we have not launched Celavive in China, but plan to do so in the fourth quarter. We expect this launch to be just as exciting and successful as the launch that occurred in the first quarter.

Our strategy for Celavive also includes rolling out additional complementary products to this line in 2018 and we will update you on that aspect of the strategy on future calls. On a regional basis, our overall results continue to be driven by our Asia-Pacific region and China in particular.

Our results in China reflect the strong customer response generated by the product promotion we offered in that market, as that promotion contributed approximately $11 million to sales for the quarter. Additionally, we are very close to rolling out our new WeChat platform in China.

As you know, WeChat is China's most widely used do-it-all app because of its wide range of functionality. This platform will make it easy for our China sales force to connect with potential and existing customers, introduce USANA products to them and complete sales.

While it’s always difficult to quantify the positive impact in app such as this might have on the business, we believe that it will significantly improve the overall experience of doing business with us in China. With the rollout of WeChat and the launch of Celavive in China we are confident about our continued growth in this important market.

In the Americas and Europe region, our results continue to be flat to down on a year-over-year basis, although we saw some improvement on a sequential quarter basis. These results are not acceptable to us as we have initiatives in 2018 to target key markets in this region, including the U.S.

These initiatives include our social sharing strategy, which we began rolling out late in the first quarter and is beginning to show results, and continuing to educate, train and promote our new Celavive line, which represents an opportunity for us to acquire a new customer demographic in this region around the world.

Additionally, in June, we plan on opening four new European markets, Germany, Spain, Italy and Romania. In preparation for this expansion, we have already made products available to preferred customers on a not for resale basis in these markets.

We are also utilizing our European regional headquarters in Paris, France to efficiently and effectively expand throughout Europe. We are already seeing excitement around these new markets, which we expect to add incremental sales and help generate momentum in the region.

In closing, I’d like to express my confidence in the strength of our underlying business and our growth potential for 2018. As reflected in the updated outlook that we issued yesterday after market close, we believe that our 2018 initiatives will position USANA to again deliver another year of record results.

With that, I will now ask the Operator to please open the lines for questions..

Thank you. [Operator Instructions] And we go to our first question from Frank Camma with Sidoti..

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And it appears there are no further questions at this time. I’d like to turn the conference back to Mr. Patrique Richards for any additional or closing remarks..

Thank you for your questions and for your participation on today's conference call. If you have any remaining questions, please feel free to contact Investor Relations at 801-954-7961..

This concludes today's conference. We appreciate your participation. You may now disconnect..