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Management Series: USANA Health Sciences

USANA Health Sciences (USNA; $46.16; $879MM Market Cap) participated in WTR’s Consumer Products Virtual Investor Conference on June 6, 2024. Representing the company was CFO Doug Hekking. This report contains a transcript of the conversation, which can be accessed on demand. The 10% organic sales growth in Mainland China in 1Q24 1Q, coupled with the large meeting of 17,000 participants that was recently held there, is an encouraging sign for that important market, and USANA remains cautiously optimistic. However, there was a promotion there around Chinese New Year that may have had more of a short-term effect. The company would like to see more sustainable traction in that market that still faces a challenging operating environment. However, USANA does believe it has weathered the storm there over the past several years relatively well. Look for an increased focus on Active Associates, which are the micro-entrepreneurial business builders in the USANA ecosystem. The company believes that maybe it hasn’t focused as much as it should have on that constituency in recent years, and it will look to re-engage. USANA had a soft opening in India in December 2023, and it remains in the early stages of opening that market. While it is optimistic about the long-term opportunity for India, it will probably be a slow and steady build. India comes with its own set of challenges, so the company is coming into that market differently than it has with other markets. Over the past two or three years, USANA has probably looked at more M&A opportunities than it has in the company’s history. While USANA did make a large, transformational acquisition in buying Baby Care many years go to enter China, future acquisitions will more likely be focused on adding products or technologies to broaden out and build some new core competencies in the health and wellness space. USANA has nearly $17 per share of net cash on its balance sheet and generates ample free cash flow. It doesn’t seem like initiating a dividend is in the cards, so share repurchases will likely remain the preferred vehicle with which to return cash to shareholders. WTR held its inaugural Consumer Products Virtual Investor Conference on June 5 and 6. Presentations are available on demand here and 1x1 availability requests can be sent to  .