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USANA will be holding their annual convention next weekend in Salt Lake City. The 16th Annual Convention, which will take place August 27th- 30th will be held at the EnergySolutions Arena and the Salt Palace Convention Center. The health and nutritional supplement company expects over 8,000 people to be in attendance this year.

On tap to speak at the convention this year will be some popular authors as well as some big names in the Network Marketing Industry. Tim Sales, world renowned Network Marketing Industry expert, will speak to attendees on how to be successful and increase their business.

Also speaking to attendees will be several famous authors; ‘Rich Dad, Poor Dad’ author Robert Kiyosaki will be on hand as will Paul Zane Pilzer, best selling author of ‘The New Wellness Revolution’ and ‘How to Make a Fortune in the Next Trillion Dollar Industry. USANA will also welcome Dr. Denis Waitley, author of ‘The Dragon and the Eagle’ who will speak to conventioneers about the book and Chinese-American Relations.

The convention will also serve as a platform for USANA to unveil an exciting new product to its distributors.

Along with product announcements, and guest speakers, the conference will serve as a learning opportunity for the distributors with plenty of business and health seminars to attend over the span of the three day conference.

“Each year, USANA’s international convention attracts more people from all over the world,” USANA CEO Dave Wentz said. “I’m confident this convention will be the best one yet, with the launch of additional high-quality products and remarkable presentations by some of the world’s most successful entrepreneurs.”

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The announcement yesterday that USANA has promoted Dave Wentz to CEO from President seems like good news for the company but also may require some further examination into other positions Wentz has as well.

As we reported last month, Wentz was appointed the Direct Selling Association’s new Chairman. While the news seemed a bit harmless at the time (Wentz was President of USANA when the announcement was made and not an officer of the Company) it does now represent some questions as to whether or not there may be a conflict of interest or questions about corporate governance with him now serving both roles.

While the overall role of the DSA remains a bit sticky to us (after the Weekenders debacle and the DSA having no information to provide at all about what happened - even after several repeated requests to the company), it does beg to ask, should an active CEO of a publicly traded company that also serves as Chairman of an organization that lists its competitors as members be acceptable?

The DSA does not list any information on its site about what it takes to be the Chairman of the organization, nor does it disclose how much money any of the organizations donate or pay over the year for the privilege to say they are part of the DSA other than to vaguely express that membership dues are based on the yearly total of direct sales a company generates. This does not include any retail or catalogue sales a company may have, only the direct selling portion of the business.

In a show of good corporate governance and disclosure, I absolutely think that the DSA should list (or at least provide access to) how much money a participating organization donates/gives to them on an annual basis - especially those that are public. What is a bit more ironic is that the DSA announced a “DSA Ethics and Self Regulations Committee Teleconference” is scheduled for next week but of course, no media is allowed. Then again, why would any media be allowed to a Self Regulation conference?

Which gets me back to the original question…as the CEO of a publicly traded company things like ethics and regulatory issues are all public information and fall under the guidelines of corporate governance. While I recognize that the DSA is neither public nor demanded to make any of their financial information public, since they are organized to not only “protect and serve” the interests of the public and the companies in which they are made up of, why be so secretive and not make the information available - especially since its new Chairman must do so in his other job. The joint positions that Dave Wentz now holds do raise questions of a conflict of interest. We have no question about his ability to serve in his current roles nor his ability to do so at the highest level and garner great success, however as the newly appointed CEO and officer of a publicly traded company, should he also be the Chairman of an organization that determines whether or not companies which are competitive to his own are accepted or rejected? hmmm

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As we reported earlier, Myron Wentz, founder of USANA Health Sciences, will be stepping down to focus on his role as Chairman of the board and his son Dave, formerly President of the company will now assume to role of CEO.

In some other management changes, Gil Fuller, Executive VP and CEO has decided to retire. Effective September 1st, he will step down from his management position but will continue to be engaged with the company as a strategic advisor. Jeff Yates, who is currently the VP of finance, will serve as the new CFO.

There were some other management changes made including:
- Dr. Fred Cooper, Ph.D., previously executive vice president of operations, is promoted to president and chief operating officer.
- Mark Wilson, previously executive vice president of customer relations, is promoted to executive vice president of North America.
- Kevin Guest, previously executive vice president of marketing, is promoted to chief marketing officer.
- Deborah Woo, previously vice president with responsibility for operations in Japan, South Korea, Hong Kong, and Taiwan, is promoted to executive vice president of Asia.
- Jim Bramble, USANA’s general counsel, takes on the added role of corporate secretary.
- Roy Truett, previously vice president of information technology, is promoted to chief information officer.

“I’m pleased to announce today’s promotions,” said Dr. Myron Wentz, Chairman of the Board of Directors, USANA Health Sciences. “Every one of these individuals is highly qualified to fill their new roles and will continue to help USANA achieve its long-term growth potential

No word yet on why all the sudden changes or if they had anything to do with the mixed numbers released as second quarter results or the failure of the company to take it private. Maybe Wentz has decided to shake things up now and re-group in an effort to perhaps try to take the company private again at a later date.

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The second quarter results should be starting to file in during the next couple weeks, and the first major company to release results is USANA. The numbers were mixed, but overall not terrible given the somewhat public legal battle over taking the company public.

Net sales for the second quarter of 2008 increased by 1.5% to $109.2 million, compared with $107.5 million in the second quarter of the prior year. USANA attributes the increase in net sales to a new incentive program for distributors along with strong foreign currencies. Earnings per share saw a slight decrease from second quarter of 07 falling from $0.66 per share to $0.62 per share, a 6% percent decrease. USANA says that the slight decline comes from a slight rise in operating costs.

North America saw a 3.3% percent decrease in sales to $65.9 million, however net sales in the Asia Pacific Region increased by 9.9% percent to $43.3 million.

“We were pleased to see our second quarter financial results come in above our original expectations,” said Dave Wentz, president of USANA Health Sciences. “Achieving sequential quarterly sales gains in all but two of our 13 markets gives me confidence that our business is starting to regain its upward momentum. We will continue to focus on accelerating our top-line growth.”

USNA’s stock (NASDAQ: USNA) didn’t react too well to the news sending the stock down a bit to close at $27.10.

USANA predicts that for the full year 2008, net sales will be somewhere around $435-$445 million dollars and earning per share, on a fully diluted basis will be between $2.30 and $2.36.

In a bit of more surprising news from the company, Dave Wentz (son of Dr. Myron Wentz) will takeover as CEO after his stint as President. Dr. Wentz will remain on as Chairman. No question the debacle of trying to take the company private has had its effects on the senior Wentz over the past few weeks. A concern we have is now Dave is the CEO of USANA and the Chairman of the DSA as we reported last month.

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