Usana

Infobox Company
company_name = USANA Health Sciences, Inc.
company_type = Public (NYSE: USNA)
foundation = Salt Lake City, UT (1992)
location = Salt Lake City, UT
key_people = Myron Wentz, Ph.D., Founder & Chairman
David Wentz, Chief Executive Officer
Fred Cooper Ph.D., President and Chief Operating Officer
Jeff Yates, Vice President and Chief Financial Officer
Tim Wood, Ph.D., Executive Vice President of Research and Development

industry = Nutrition & Skin Care products
products = Nutritional supplements, personal care
homepage = [http://www.usana.com www.usana.com]
[http://quotes.nasdaq.com/Quote.dll?page=multi&mode=stock&symbol=USNA]

Usana (nasdaq|USNA), or USANA Health Sciences, Inc., is a multilevel marketing company that produces various nutritional and skin-care products. Most of these products are manufactured in the United States [http://www.sec.gov/Archives/edgar/data/896264/000104746908002668/a2183527z10-k.htm] and sold in thirteen international markets. The company has sponsored and provided products to several Olympic and professional athletes. In 2007, several of its executives were discovered to have made false statements in their resumes.cite news| title=Another Usana official forced to revise resume | author=Paul Foy| url=http://www.heraldextra.com/content/view/225104/ | publisher="Daily Herald"| date=2007-06-12] .

Background

USANA is based in Salt Lake City, Utah. The company employs approximately 1,000 people worldwide, and has 176,000 associates and so called "preferred customers" in its worldwide distribution network. Approximate sales are $427 million annually.cite news| title=USANA Annual Report 2007 | url=http://secfilings.nasdaq.com/edgar_conv_html%2f2008%2f03%2f13%2f0001047469-08-002668.html#FIS_BUSINESS | publisher="United States Securities and Exchange Commission"| date=2007-12-29] The company sells its products through network marketing and follows a binary plan for compensation. [http://www.nbr.co.nz/docs/US-CEN-Binary%20Comp%20Plan.pdf] The products are not available through retail channels, but instead can only be obtained by a direct order to the company or through one of its independent associates.

The company was rated, by Forbes, as one of the [http://www.forbes.com/lists/2006/23/biz_06200best_The-200-Best-Small-Companies_Rank.html top 200 small companies] from 2004-2006, but failed to make the Forbes list in 2007.

USANA's Q2 filing for the 2007 fiscal year marked the 20th consecutive quarter of record sales for the company. [http://www.sec.gov/Archives/edgar/data/896264/000110465907074109/a07-26263_110qa.htm] USANA's Q3 earnings release for the 2007 fiscal year marked the second best quarter for sales in company history. [http://www.sec.gov/Archives/edgar/data/896264/000115752307009889/a5519605ex99.txt] However, USANAs Q4 earnings for 2007 fell flat with earnings declining slightly to $11.06 million from $11.1 million. The company attributed this to a 5% decline in the number of US associates. [ [http://biz.yahoo.com/ap/080206/earns_usana_health_sciences.html?.v=1 USANA Shares Slide on Profit Report: Financial News - Yahoo! Finance ] ] A month later USANA cut its estimated earnings per share for its first quarter of 2008 from 63 cents - 66 cents per share to 44 cents - 46 cents pers share. [ [http://www.reuters.com/article/marketsNews/idUKBNG23142920080327?rpc=44?.v=1 UPSDATE 1-USANA Health Sciences cuts Q1, '08 view; shares tumble: Financial News - Reuters Finance ] ]

In 2008, Utah Business magazine named USANA one of Utah's "Best Companies to Work For." [ [http://findarticles.com/p/articles/mi_m0EIN/is_2007_Nov_21/ai_n21119252 USANA Named One of Utah's 'Best Companies to Work For' by Utah Business]

Worldwide Distribution

As of 2007, USANA is marketed in the U.S.A., Canada, Australia, New Zealand, United Kingdom, Netherlands, Japan, Hong Kong, Taiwan, Korea, Singapore, Mexico, and Malaysia.

Products

USANA products encompass four brands: USANA Nutritionals, USANA Macro-Optimizer foods, Sensé skin- and body-care products, and Rev3 Energy drinks.

Nutritionals

The USANA Nutritionals brand composed of the company’s Essentials and Optimizers nutritional supplements.

Macro-Optimizers

The USANA Macro-Optimizers brand is composed of a variety of drink mixes and nutritional bars. USANA also has designed a weight-loss and weight-maintenance program called RESET, which utilizes the Macro-Optimizers and Essentials.

Sensé

The USANA Sensé brand includes the Basics and the Enhancers, which are made up of facial-care products, as well as Sensé Splash, which consists of hair- and body-care products.

In 2007, USANA announced it was waiting on a U.S. patent for their preserving technology they utilize in their Sensé formulas. The technology allows the company to manufacture Sensé products without adding the paraben preservatives which have been linked to tumors and other health problems. [cite news|title=New Recipe Leads to New Revenue Growth| author=Marilyn Much|publisher="Investor's Business Daily"| date=2005-03-21]

Rev3 Energy

Introduced at Usana's 2008 international convention, the drink comes in two forms, a 12 ounce can or a powder mix in a packet which has fewer calories and sugar. Usana claims both products are low-glycemic and therefore have a less dramatic spike in blood sugar levels after consumption.Fact|date=September 2008.

Résumé controversy, and legal allegations

In 2007, Usana faced repeated controversy as a number of their executives were discovered to have made false statements regarding their certification.

Denis Waitley, a member of the board of directors, resigned from his post after it was discovered that he did not have a Master's degree from the Naval Postgraduate School in Monterey, California. [http://www.sec.gov/Archives/edgar/data/896264/000110465907026138/a07-10015_1defa14a.htm] . In addition to this USANA informed the Wall Street Journal that they were unable to verify Waitley's Ph.D. from the unaccredited La Jolla University.cite news| title=Pyramid, Phony Bios | author = Don Bauder| publisher="San Diego Reader"| date=2007-09-13]

Ladd McNamara, a Usana sales associate, quit the company's medical advisory board after it was discovered his license to practice medicine had been revoked by the State Medical Board of Ohio in May 2007. [http://www.nbr.co.nz/docs/35081069_ohio.pdf] McNamara was required to tell the Ohio Medical Board that he had surrendered his license in Georgia [http://www.nbr.co.nz/docs/04-036573_georgia.pdf] when he renewed his license in Ohio in 2006. Instead, Ohio learned that information elsewhere.cite news| title=Troubled USANA faces new stock woes | author=Helen Malmgren| publisher="The National Business Review"| date=2007-08-16]

The Vice President of Research and Development, Timothy Wood, was forced to change his résumé to list his doctorate from Yale University as being in forestry, as opposed to the doctorate in biology he claimed.cite news| title=CFO's no CPA - USANA under fire on executive bios | author=Roddy Boyd| publisher="New York Post"| date=2007-06-12]

Usana's now retired Executive Vice President and Chief Financial Officer, Gilbert Fuller, reported biographical information that showed him as a CPA, [http://www.sec.gov/Archives/edgar/data/896264/000110465907018746/a07-6205_1def14a.htm] despite his license having lapsed in 1986; his license expired due to his "failure to pay renewal fees". [https://secure.utah.gov/llv/llv?action=detail&license_no=120645-2601&expiration_date=1986-08-31+00%3A00%3A00.0&license_id=23227 License 120645-2601 Detail ] ] Mr. Fuller received his CPA license in 1970, and remained active until 1986. While it is not required of a CFO to be a CPA, use of the CPA title while inactive is considered unlawful by the by-laws of the Utah Association of Public Accountants.

In March 2007, Barry Minkow, an executive of the Fraud Discovery Institute, delivered a 500-page report to the United States Securities and Exchange Commission (SEC) accusing Usana of operating a pyramid scheme.cite news|title=As stocks plunge, Usana sues Minkow over report | url=http://findarticles.com/p/articles/mi_qn4188/is_20070317/ai_n18742962 | author=Dave Anderson |publisher="Deseret Morning News"|date=] These allegations prompted an informal investigation into USANAs business practices by the SEC which concluded on January 11th 2008 with the SEC recommending that no enforcement action be taken against the company. [cite news| title=UPDATE 1-SEC ends Usana probe with no action; shares up | author=Pratish Narayanan |url=http://www.reuters.com/article/governmentFilingsNews/idUSBNG13838520080111 |publisher=Reuters | date=2008-01-11]

Subsequently, USANA lodged a lawsuit against Minkow and his San Diego-based Fraud Discovery Institute from U.S. District Court in Salt Lake City for defamation and stock manipulation. Some of those claims were thrown out March 3 2008 by U.S. District Judge Tena Campbell.

On July 29 2008, USANA announced that they had settled the remaining of the lawsuit with Minkow. Minkow agreed to taking all reports related to USANA off of the Fraud Discover Institute web-site, shut down another web-site devoted to USANA's dealings in China, and removed interviews with failed USANA distributors from YouTube. He also agreed to never trade in USANAs stock again. The remaining details of the settlement remain undisclosed. Minkow came out with his first critical report of USANA in February 2007 when he bought "put" options on the stock in a legal bet the price would fall.cite news|title=Supplement-maker USANA settles suit with critic| url=http://deseretnews.com/article/1,5143,700246669,00.html | author=Paul Foy
publisher="Associated Press"|date=July 29, 2008 ]

Athlete sponsorships

USANA sponsors various athletic teams and individual athletes, providing them with free nutritional supplements as well as monetary donations in certain cases, such as the USA Bobsled Team Radcliff.cite news| title=USANA Becomes Official Supplement Supplier of USA Bobsled Team Radcliff | url=http://www.reuters.com/article/pressRelease/idUS154480+23-Apr-2008+BW20080423/ | publisher="REUTERS"| date=2008-04-23]

USANA's partnership with the WTA in 2006 made headlines, as it was the first time the women's professional tennis organization had provided its players with vitamins and health supplements that were backed by an "athlete guarantee" of purity from substances prohibited by the World Anti-Doping Agency. [cite news|title=WTA Tour Signs On With Vitamin Supplier| author=Liz Robbins|publisher="New York Times"| date=2006-08-23] [cite news|title=USANA, women’s tennis tour ink deal on ‘clean’ supplements |publisher="Salt Lake Tribune"| date=2006-08-23]

Philanthropy

Usana has chosen the Children's Hunger Fund (CHF) as its charitable cause. [http://www.childrenshungerfund.org/] To date Usana has raised over $8 million dollars for CHF Fact|date=September 2008. At Usana's 2008 international convention, $100,000 was raised for CHF.Fact|date=September 2008

Partnership

Usana is partnered with the Linus Pauling Institute (LPI). [http://lpi.oregonstate.edu/] LPI is an advanced research institute involved in in-depth research on vitamins/antioxidants, minerals, phytochemicals and other health promoting compounds.

References

External links

* [http://www.usana.com Official website]
* [http://www.sltrib.com/ci_8470183 USANAS Claims Tossed]
* [http://www.reuters.com/article/governmentFilingsNews/idUSN0929838220070810 Usana says Forbes article makes false statements]
* [http://www.forbes.com/markets/2007/08/08/usana-vitamins-marketing-markets-equities-cx_er_0808usana.html Hard To Swallow]
* [http://www.nbr.co.nz/home/column_article.asp?id=18656&cid=4&cname= Usana defends practices]
* [http://www.nbr.co.nz/usana Most people won't get their money back]
* [http://biz.yahoo.com/bw/070717/20070717006205.html?.v=1 Most Recent Financial Reporting]
* [http://www.forbes.com/feeds/ap/2007/07/17/ap3923947.html "Auditor for Vitamin Maker USANA Quits"]
* [http://biz.yahoo.com/bw/070905/20070905005753.html?.v=1 "USANA Appoints PricewaterhouseCoopers LLP as New Auditor"]
* [http://www.businessweek.com/hot_growth/2005/company/USNA.htm Business Week profile, 2005]
*Independent Analysis of the Usana business model, http://www.pyramidschemealert.org/PSAMain/news/UsanaBusinessModelAnalysis.html
*Independent Rebuttals to Minkow Report, [http://www.marketwaveinc.com/ "Resources, Network Marketing Articles"]
* [http://www.frauddiscovery.net/ClementsResponse.pdf Minkow rebuttals to rebuttals]
* [http://www.casewatch.org/civil/usana/senter_complaint.pdf "Guerin Senter vs. Usana"]
* [http://www.casewatch.org/civil/usana/kapur_complaint.pdf "Ashok Kapur vs. Usana"]
* [http://www.casewatch.org/civil/usana/minkow_complaint.pdf "Usana vs. Minkow"]