USANA HEALTH SCIENCES INC

Our vision is to improve the overall health and nutrition of individuals and families around the world. We do this through developing and manufacturing high-quality, science-based nutritional, and personal care and skincare products that promote long-term health, and providing a global direct selling opportunity for our Associates who desire to distribute our products and earn supplemental income. Our strategy is to capitalize on our operating strengths, which include (i) a strong R&D program; (ii) significant in-house manufacturing capability; (iii) high quality science-based products; (iv) a rewarding Associate Compensation Plan; (v) a scalable business model; and (vi) an experienced management team.

Emphasis on Research and Development. We have a technical team of experienced scientists, including several holding doctoral degrees, quality engineers, and regulatory specialists who contribute to our R&D activities. In our R&D laboratories, our scientists and researchers:

•Investigate activities of natural extracts and formulated products in laboratory and clinical settings;

•Identify and research combinations of nutrients that may be candidates for new products;

•Study the metabolic activities of existing and newly identified nutritional ingredients;

•Enhance existing USANA brand products, as new discoveries in nutrition, personal care and skincare are made;

•Formulate products to meet diverse regulatory requirements across all of our markets; and

•Investigate processes for improving the production of our formulated products.

Our in-house research team also conducts double-blind, placebo-controlled, clinical studies, which are intended to further evaluate the efficacy of our products. In addition, we collaborate with outside research organizations to further support various aspects of our R&D efforts. Our in-house research team has funded clinical research programs and works closely with scientists at a number of universities and research institutes, including those listed under the caption “Research and Development” above, to maintain our leadership in clinical research in nutrition, oxidative stress, glycemic stress, chronic inflammation and health implications of the microbiome. It is through our internal R&D efforts, as well as our relationships with outside research organizations and health care providers, that we can provide what we believe to be among the highest quality health products in the industry.

In-house Manufacturing. We manufacture products that account for approximately 69% ofour product sales. We believe that our ability to manufacture our own products in-house is a significant competitive advantage for the following reasons:

•We can better control the quality of raw materials and finished products;

•We can more reliably monitor the manufacturing process to better guarantee potency and bioavailability and to reduce the risk of product contamination;

•We can better control production schedules to increase the likelihood of maintaining an uninterrupted supply of products for our customers;

•We are able to produce most of our own prototypes in the research phase of product development; and

•We are better able to manage the underlying costs associated with manufacturing our products.

Science-based Quality Products. As a result of our emphasis on R&D and our in-house manufacturing capabilities, we have developed a line of high quality products that we believe provide health benefits to our customers. Our products have been developed based on a combination of published research, in-house laboratory and third-party clinical studies, and sponsored research.

Rewarding Associate Compensation Plan and Support. We are committed to increasing our product sales by providing a competitive compensation plan that attracts and retains Associates who constitute our sales force. We motivate our Associates by paying incentives on a weekly basis, in most markets. Where permissible, our Compensation Plan is implemented as a global-seamless plan, meaning that Associates can be compensated each week for their business success in any market in which they have product consumers and/or a sales organization where we conduct business. Our China operations maintain their own compensation plan, which is structured differently than our plan in other markets. In China, we pay Associates on a monthly basis. We plan to make certain modifications to our Associate compensation plan to enhance the earning opportunity for Associates and to prioritize sales and customer growth under the plan.

To support our Associates, we sponsor virtual and in-person meetings and events throughout the year, where we offer information about our products and our global direct selling system. These meetings are designed to assist Associates in business development and to provide a forum for interaction with some of our Associate leaders and with members of our management team. Our strategy in 2025, and going forward, is to offer in-person meetings and events with our Associates to the extent health and safety practices make it possible. Our plan is to continue to leverage a virtual meeting element as a component of our in-person meetings. We also provide low-cost sales tools and resources, which we believe are an integral part of building and maintaining a successful home-based business for our Associates.

In addition to company-sponsored meetings, sales tools and resources, we maintain a website exclusively for our Associates, where they can access the latest USANA news, obtain training materials, manage their personal information, enroll new customers, shop for products, and register for company-sponsored events. Additionally, through this website, Associates can access other online services to which they may subscribe. For example, we offer an online business management service, which includes a tool that helps Associates track and manage their business activity, a personal webpage to which prospects or retail customers can be directed, and e-cards for advertising.

We also believe that recognition is an important factor in supporting and retaining our Associates. We understand that being a successful USANA Associate requires hard work and dedication, and we celebrate key achievements and rank advancements of our Associates. We believe that our recognition programs greatly contribute to our ability to retain our Associates.

Direct Selling Business Model. We believe that our direct selling business model provides, among others, the following advantages:

•No requirement for a company-employed sales force to sell our products, with a relatively low incremental cost to add a new active Customer;

•Commissions paid to our Associates are tied to sales performance;

•Accounts receivable are minimal because payment is required at the time a customer purchases product;

•A stream of recurring revenue generated from our monthly product subscription program known as “Auto Order,” which we utilize in all of our markets (this program offers a 10% price discount and represented 63% of our product sales volume for the year ended December 28, 2024); and

•The ability to expand into new international markets with moderate investment because we generally maintain only warehouse facilities, customer support, and minimal administrative facilities in those international markets. Larger markets, including China, however, require more significant local investment.

Hiya Direct-to-Consumer Business Model. We believe that our Hiya direct-to-consumer business model provides, among others, the following advantages:

•Subscriptions provide a steady, predictable income stream, making it easier to manage cash flow and plan for growth;

•The ongoing nature of subscriptions fosters stronger relationships with customers making it easier for them to receive products regularly, which leads to higher retention rates and loyalty;

•Focus on retaining existing subscribers which lowers expenses on acquiring new customers;

•Subscription model provides rich data on customer preferences and behaviors, which enables personalized offerings, efficient marketing and data-driven innovation insights; and

•Accounts receivable are minimal because payment is required at the time of online purchase

Experienced Management Team. Our management team includes individuals with expertise in various scientific and managerial disciplines, including global direct selling, nutrition, product research and development, international development, marketing, sales, information technology, manufacturing, accounting and finance, legal, regulatory, and operations. This team is responsible for supporting growth, R&D, international expansion, strengthening our financial condition, and improving our internal controls.