Usana runs into problems with the IRS and others

Posted Jan 23rd 2009 4:15PM by Zac Bissonnette
Filed under: Earnings Reports, Scandals

I haven't written about Usana Health Sciences (NASDAQ: USNA) since the company settled a lawsuit with Barry Minkow, an ex-con turned fraud fighter who had accused the company of operating a pyramid scheme.

The company just reported its preliminary fourth quarter and full-year results and dropped a couple bombshells in the form of "one-time adjustements":

An unanticipated arbitration award against the Company for approximately $7 million for wrongful termination of a former USANA distributor; and
Tax adjustments of approximately $1.8 million, resulting from an Internal Revenue Service ("IRS") audit of the years 2003 through 2006. The impact on cash due to these potential tax adjustments is estimated to be $10 million.

Oops! The company did manage to achieve record fourth quarter sales and earnings per share of $1.72 for the year, but "dramatic" currency changes reduced sales by approximately $9 million.

The financial results aside, the tax issues and wrongful termination judgment provide strong evidence for what many of us have been saying for a long time: This is one slimy company.

Tags: earnings, inthenews, Usana Health Sciences, UsanaHealthSciences, USNA

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Reader Comments (Page 1 of 1)

3-13-2009 @ 8:35PM

Bob Hunter said...

You don't mention who was wrongfully
fired! Are you one of those MLM haters?
Pretty strong words from ANYONE who claims to know anything about the Market
where it can't get any more slimey.(except politics of course)Oh yes,mortgage brokers.Excuse me,but with the downfall of the economy,I think the term"Financial Expert" should be shelved
for a few years!