Another Class Action Suit Filed Against Usana Health Sciences


NEW YORK, April 11, 2007 — Harwood Feffer LLP today announced that a class action suit has been commenced on behalf of all persons who purchased the common stock of USANA Health Services Inc. (Nasdaq:USNA) (“USANA” or the “Company”) between July 18, 2006 and March 14, 2007, both dates inclusive (the “Class Period”).

The action is pending in the United States District Court for the District of Utah, Central Division, and names as defendants, the Company as well as certain senior officers and directors. A copy of the complaint can be obtained from the Court or can be viewed on Harwood Feffer web site at

The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the Complaint alleges that, during the Class Period, the defendants issued materially false and misleading statements regarding the Company’s business, management practices, systems and controls, and financial results, and failed to disclose: (i) that the Company’s multi-level marketing model operated as a pyramid scheme; (ii) that the Company was suffering from an exceedingly high Associate attrition rate, resulting in an unsustainable work force; (iii) that the majority of the Company’s Associates’ sales were made to each other and not to consumers; (iv) that 74% of the Company’s new Associates were failing in their sales efforts within their first year with the Company; (v) that 87% of the Associates were losing money instead of generating profits for the Company; and (vi) that the Company’s published average Associate incomes were misleading as only 3% of Associates received 70% of all commissions. The Complaint further alleges that as result of the foregoing, the Company stock traded at artificially inflated prices throughout the Class Period.

The defendants’ wrongdoing was finally exposed on March 15, 2007, when the Fraud Discovery Institute (“FDI”) issued a press release and The Wall Street Journal published an article discussing a three-year investigation by the FDI that had revealed USANA’s fraudulent business practices.

As a result of the foregoing publications, the price of USANA stock plummeted $8.92 per share, or 15%, to close on March 15, 2007 at $49.85 per share, on unusually heavy trading volume. On March 19, 2007, USANA announced that the Securities and Exchange Commission (“SEC”) was commencing an informal investigation into the Company.

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