OpTree

Well it looks like its going to be an Herbalife day today here at OpTree!. The embattled nutritional supplement company issued a statement to respond to the increasing pressure from the allegations from the Fraud Discovery Institute that its products may pose a consumer safety concern due to “excessive” amounts of lead.

We have confidence in the safety of our products. It is irresponsible to equate Prop 65, which concerns disclosure, with the safety of our products.

Prop 65 is a consumer disclosure and labeling statute requirement that under certain circumstances requires the disclosure of the presence of any of approximately 800 specified chemicals (including lead).

Our products fall within FDA suggested guidelines for the amount of lead that consumers can safely ingest through their diet and the FDA sets specific limits on lead content in certain foods.

Our products include natural ingredients, and trace levels of naturally occurring lead is present in virtually all natural ingredients. This is not a question of contamination resulting from the manufacturing process or as a result of unsafe handling. In the past, several common foods, such as chocolate, have come under question of Prop 65.

We follow established written quality assurance and quality control procedures. We stand behind the safety of our ingredients and products.

It’s going to be a potentially interesting day today for Herbalife and its CEO Michael Johnson who is scheduled to speak at the Avondale Conference in NYC with other industry leaders. No word as to whether or not Johnson is going to skip the event given the news but we will follow this today.

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Michael Johnson, Chairman and Chief Executive Officer of Herbalife, will be one of the speakers today at the annual Avondale Partners 2008 Consumer Conference. Other MLM executives will represent the industry as well, including executives from USANA, NuSkin and Tupperware.

Avondale Partners, a national investment banking firm headquartered in Nashville Tennessee, will hold the conference at the Millennium Broadway Hotel in New York on May 20th. The goal of the conference is to bring together executives from public companies active in the consumer sector along with private equity firms also active in the consumer sector.

The one day seminar will include investor presentations from each participating company, as well as individual breakout sessions from individual companies. There will also be a luncheon panel discussion led by a private equity firm executive to speak about general market trends.

Avondale will make the presentation available to those who cannot attend the session in New York City. The presentation given by Michael Johnson will be available live on the investor relations section of the Herbalife website.

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Jim Cramer host of the CNBC show, Mad Money, once again welcomed Michael Johnson, Chairman and CEO of Herbalife (HLF) to the show Tuesday night, February 26th. This was Johnson’s second appearance in only six months. With Herbalife’s solid growth over the last year Cramer was interested in discussing with him how the economy has or has not affected the company. Sales in North America alone are up almost 20 percent while sales throughout the rest of the world, are even stronger with a 50% rise in sales in South America and a staggering 145% in China. This story coincides with our recent review of publicly traded network marketing stocks where Herbalife was one of the few positive standouts in the sector.

Johnson attributes the company’s success to the high standard of quality and care that go into the making of each product, as well as a motivated distribution sales force. Johnson wanted to stress the fact that Herbalife has done well in most economic situations, and he feels that the big guns on Wall Street might want to re-evaluate their opinion on the direct sales industry. Cramer ended the segment with a big compliment, praising Herbalife, and saying, “Johnson Is Money”.

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