USANA Health Sciences - Background and Organization

Background and Organization

USANA was founded by an immunologist and microbiologist Myron Wentz. USANA, based in West Valley City, Utah, sells its products through multilevel marketing: distributors recruit and profit from other distributors. The products are not available through retail channels, but instead can only be obtained through one of its independent distributors (referred to as "associates") or by direct order through the company. The company has approximately 247,000 active associates and 64,000 "preferred customers" in its worldwide distribution network. In 2012, 91% of product sales was purchased by associates As of 2013, its products are marketed in the United States, Canada, Australia, New Zealand, United Kingdom, Netherlands, Japan, Hong Kong, Taiwan, South Korea, Singapore, Mexico, Malaysia, Philippines, France, and Thailand.

Beginning in 1993, Dallin A. Larsen served as USANA’s vice president of sales (and later as consultant to USANA’s president and special advisor to the board of directors) prior to founding the MLM beverage company Monavie in 2005.

From 2004 to 2006, USANA was named on Forbes “200 Best Small Companies” list. In 2007, USANA was not included on Forbes' 200 Best Small Companies” list, and an article in the magazine quoted industry and government experts who had raised questions about USANA’s business practices and products. USANA responded by issuing a press release denying that the company had breached a $40 million loan agreement with Bank of America.

During 2007, USANA faced repeated controversy after several of its executives were discovered to have made false statements regarding their qualifications. The executives included Denis Waitley, a member of the board of directors who had falsely claimed to hold a master's degree from the Naval Postgraduate School; sales associate Ladd McNamara, who quit the company's medical advisory board after it was discovered that his license to practice medicine had been revoked; the Vice President of Research and Development, Timothy Wood, who was found to have doctorate in forestry, as opposed to biology as he had claimed; and the Executive Vice President and Chief Financial Officer, Gilbert Fuller, who had continued to use the title of CPA, though his CPA license had expired 10 years before he joined USANA in 1996.

In August 2007, USANA announced that it had been notified by the Securities and Exchange Commission (SEC) that its shares were subject to delisting from the NASDAQ because the company had failed to have the financial information in its quarterly Form 10-Q reviewed by an independent auditor. USANA reported this was due to their public accountant resigning and not yet being replaced. In October 2007, USANA announced that NASDAQ had determined they were in compliance and their stock would continue to be listed.

On 3 January 2011, USANA completed the transfer of its common stock from the NASDAQ to the New York Stock Exchange.

On 10 May 2011, it was announced that 4 of USANA's executives (President and COO Fred W. Cooper, CFO Jeffrey A. Yates, EVP of Sales Mark H. Wilson, and VP of Finance Riley Timmer) had unexpectedly resigned their positions at the company to pursue an unspecified business opportunity.