896264--3/17/2010--USANA_HEALTH_SCIENCES

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Forward-Looking Statements and Certain Risks As a network marketing company, we are dependent upon an independent sales force and we do not have direct control over the marketing of our products. The loss of a significant Associate or downline sales organization could adversely affect our business. The violation of marketing or advertising laws by Associates in connection with the sale of our products or the promotion of our Compensation Plan could adversely affect our business. Network marketing is subject to intense government scrutiny and regulation, which adds to the expense of doing business and the possibility that changes in the law might adversely affect our ability to sell some of our products in certain markets. We may have or incur obligations relating to the activities of our Associates. Our business is subject to the effects of adverse publicity and negative public perception. The loss of key management personnel could adversely affect our business. The beneficial ownership of a significant percentage of our common stock gives our founder and parties related to or affiliated with him effective control, and limits the influence of other shareholders on important policy and management issues. Sales by our shareholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of our common stock. Our stock price has been volatile and subject to various market conditions. Our products and manufacturing activities are subject to extensive government regulation, which could limit or prevent the sale of our products in some markets. Our net sales are significantly affected by our success in growing existing markets, as well as opening new markets. As we continue to expand into international markets, our business becomes increasingly subject to political, economic, legal and other risks. Changes in these markets could adversely affect our business. An increase in the amount of incentives paid to Associates reduces our profitability. Our business is subject to the risks associated with intense competition from larger, wealthier, and more established competitors. Taxation and transfer pricing considerations affect our operations. Fluctuation in the value of currency exchange rates with the U.S. dollar affects our operations and our net sales and earnings. Disruptions to shipping channels that we use to distribute our products to international warehouses may adversely affect our margins and profitability in those markets. The inability to obtain adequate supplies of raw materials for products at favorable prices, or at all, or the inability to obtain certain products from third-party suppliers, could have a material adverse effect on our business, financial condition, or results of operations. Shortages of raw materials may temporarily adversely affect our margins or our profitability related to the sale of those products. Nutritional supplement products may be supported by only limited availability of conclusive clinical studies. As a manufacturer, we may be subject to product liability claims. Our business is subject to particular intellectual property risks. Our manufacturing activity is subject to certain risks. A failure of our information technology systems would harm our business. We may incur liability under our "Athlete Guarantee" program, if and to the extent participating athletes make a successful claim against USANA for testing positive for certain banned substances while taking USANA nutritional supplements.

Full 10-K form ▸

896264--3/17/2010--USANA_HEALTH_SCIENCES_INC