USANA Health Sciences Inc Strategic Acquisition of Hiya Health Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Doug Lane - Water Tower Research LLC - Analyst : Yes. Hi, everybody. Excuse me. Doug, I know in the press release, you said that the acquisition is expected to be immediately accretive to 2025 adjusted EBITDA. Can you tell us whether or not you think it will be accretive to EPS?

Question: Doug Lane - Water Tower Research LLC - Analyst : Okay. That makes sense. And then there's a couple of things going on here from a product mix. You mentioned it, the channel geography, all that kind of thing. So it seems to me that with 90% of your sales overseas and 100% of Hiya domestic that the logical thing is to see Hiya distributed overseas through your international associate and preferred customer program. So is that the way you see it? And how long do you think it will be before you can start to market Hiya overseas through your channels?

Question: Doug Lane - Water Tower Research LLC - Analyst : Okay. All right. That makes sense. So then I'll flip it over here where only 10% of your business is in the US And so actually, in the combined company, it will be a little bit more higher than USANA in the US and through two distinct sales channels. So what's the cross-pollination there? How much Hiya do you think goes through the associate and preferred customers and how much of USANA goes through direct-to-consumer e-commerce? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 23, 2024 / 10:00PM, USNA.N - USANA Health Sciences Inc Strategic Acquisition of Hiya Health

Question: Doug Lane - Water Tower Research LLC - Analyst : Okay. That's helpful. Thanks, Jim. Thanks, guys.

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Good evening, gentlemen. This is Andrew DeAngelis on for Anthony this evening. JJust could you talk a little bit about the sourcing of this transaction, a very interesting deal?

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Yeah, exactly. How this kind of deal came to fruition?

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Yeah, it definitely seems like a very strong fit. Can you talk about the quantifiable synergies at all that you're thinking about over the next 12, 24 months?

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Thank you. It does sound like the complementary geographic footprint of the business will lend to some quantifiable tax benefits for you. Have you been able to look into that at all? And can we stand any expectations around tax rate going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 23, 2024 / 10:00PM, USNA.N - USANA Health Sciences Inc Strategic Acquisition of Hiya Health

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : That's great guys. Thank you.

Question: Ivan Feinseth - Tigress Financial Partners LLC - Analyst : Congratulations on the acquisition and thanks for taking my call. Some of the questions I had have been answered. But what do you think, one, within the child health care, child nutrition area? Do you think that there are other products that you could codevelop or areas to target? And then overall, in your acquisition strategy, what other market segments or demographic segments do you envision or think about adding to your portfolio as well through acquisitions like this?

Question: Ivan Feinseth - Tigress Financial Partners LLC - Analyst : And then in light of the change in administration and the focus on making America healthy, what kind of opportunities do you see both for USANA going forward and for Hiya and USANA together, where do you think that you could really benefit from, hopefully, the positive upcoming changes that we should see?

Question: Ivan Feinseth - Tigress Financial Partners LLC - Analyst : And then as you're like active lifestyle brand or there's sadly that there are a lot of young kids who may be drinking a lot of these energy drinks that are really not good for them, but maybe there's a market for. I don't want to call it sports nutrition, but for the higher-end demographic of your 0 to 18 range for Hiya. It's been opportunities to -- for product development in that area.

Question: Ivan Feinseth - Tigress Financial Partners LLC - Analyst : Well, great speaking with you as always. Congratulations, Darren, to join the USANA team, and I wish everybody happy holidays.

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Yeah, I just wanted to follow up. Darren, are you prepared to share any metrics around your subscription base relative to growth, retention?

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Okay. And just are you firmly committed to the subscription model at this point in time? Is that going to be 100% of the business composition for the foreseeable future?

Question: Andrew DeAngelis - Sidoti & Co LLC - Analyst : Thank you.