UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
July 9, 2003
USANA HEALTH SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 0-21116
Utah 87-0500306
(State or other jurisdiction of (IRS Employer Identification
incorporation) Number)
3838 West Parkway Boulevard
Salt Lake City, Utah 84120
(Address of principal executive offices, Zip Code)
Registrant's telephone number, including area code: (801) 954-7100
Former name or former address, if changed since last report: Not Applicable
Item 2. Acquisition or Disposition of Assets
Effective July 1, 2003, USANA Health Sciences, Inc. (the "Company") acquired all
of the issued and outstanding stock (the "Acquisition") of Wasatch Product
Development, Inc., a Utah corporation ("WPD"). The Acquisition was accomplished
through a wholly-owned subsidiary of the Company, USANA Acquisition Corp, a Utah
corporation ("USANA Acquistion"), pursuant to a written Stock Purchase Agreement
dated effective July 1, 2003 by and among USANA Acquisition, as Buyer, and all
of the shareholders of WDP, as "Sellers." Prior to the Acquistion, there were no
material relationships between the Company and WDP or between the Company and
any of the Sellers, or any of their respective affilitates, directors, executive
officers or associates. The Acquistion was unanimously approved by the boards of
directors of the Company and WPD and by all of the shareholders of WDP.
WPD manufactures skin and personal care products. The acquisition of WPD allows
USANA to complete a key strategic objective as regards the vertical integration
of the production of the Company's Sense products. WDP will operate in a leased
facility of approxamately 27,000 square feet in Draper, Utah. The facility
consists of office, warehouse and production facilities that are presently
adequate for the current level of business combined with USANA's production
requirements.
The terms of the transaction were determined pursuant to arms-length
negotiations between the Company and the Sellers.
- The purchase price for all of the shares was approximately $5 million in
cash.
- The purchase price was reduced by approximately $1.1 million paid directly
to creditors at closing to satisfy certain outstanding WPD borrowings.
- The total consideration paid for the Acquisition was determined pursuant to
arms-length negotiations between the Company and the Sellers.
- Substantially all employees, including management, of WDP were retained as
employees of WDP following closing.
- Key management of WDP entered into employment contracts with WDP to survive
the closing, with base compensation approximately at pre-Acquisition
levels.
- WDP will pay up to an aggregate of $200,000 in income tax liabilities of
the Sellers as a group for pre-Acquisition 2003 income or adjustments to
prior periods resulting from the Acquisition.
- The Sellers will indemnify the Company and USANA Acquisition in connection
with damages or liability for pre-Acquisition acts of WDP and breaches of
warranties and representations contained in the Stock Purchase Agreement.
- The parties paid their own expenses incurred in connection with the
Acquisition; however $15,000 of the Sellers' professional fees were paid by
WPD.
- The Sellers agreed to cooperate with USANA Acquisition in the event the
Buyer elects to treat the transaction as a purchase of assets under tax
code Section 1338, provided that WDP will pay any increase in the tax
liability of the Sellers that results from such election.
- A new board of directors of WDP was appointed at the closing, comprised of
USANA's President, David Wentz, and USANA's Chief Financial Officer,
Gilbert A. Fuller and Marc W. Ward, President of WPD.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired. The transaction is not a
significant transaction for USANA and therefore, pursuant to the
provisions of Section 210.3-05(b), the Company is not required to file
any financial statements of the target in this transaction.
(b) Pro forma financial information. Pursuant to Article 11 of Regulation
S-X, no pro forma financial information is required to be filed by the
Company in connection with this transaction.
(c) Exhibits. The following are filed as exhibits to this Current Report:
Exhibit Number Description
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(99) Press release announcing the acquisition on July 10, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
USANA HEALTH SCIENCES, INC.
By: /s/ Gilbert A. Fuller
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Gilbert A. Fuller, Chief Financial Officer
Date: July 15, 2003