USANA Sees Sales Surge in Fourth Quarter

Strong salesforce incentives proved to be a significant contributor to USANA’s (USNA—NYSE) positive results for fourth quarter 2014, not only in customer sales but also associate growth. USANA’s revenue was up 22.3 percent at $227.9 million for the quarter, while earnings were $21.3 million, or $1.65 per share, an increase of 17.0 percent, though lower than the Capital IQ Consensus Estimate of $1.92.

Sales incentives introduced in the quarter drove the number of active Associates up 31.7 percent, particularly in the company’s Asia Pacific region, which contributed to a sales surge of 34.1 percent to $163.3 million in the region, compared with $121.8 million for the fourth quarter of the prior year. Net sales also increased by 25.4 percent on a sequential quarter basis.

Full-year results included a profit of $76.6 million, or $5.60 per share, with revenue of $790.5 million, compared with $718.2 million the previous year.

Net earnings for 2014 decreased by 3.0 percent to $76.6 million, compared with $79.0 million in 2013, due primarily to the pricing and compensation plan changes implemented during the third quarter of 2013. Earnings per share for the year increased by 0.7 percent to $5.60, compared with $5.56 in the prior year.

“2014 was another exceptional year for USANA,” said Kevin Guest, USANA’s President. “Our vision as a Company continues to center on improving the overall health and nutrition of individuals and families around the world through our world-class product offering. To further this vision in 2015, we will continue to execute our overall strategy, which focuses on promoting customer loyalty, enjoyment and success with USANA.”

USANA’s full-year outlook for 2015 includes revenue in the range of $850 million to $870 million and earnings between $6.40 to $6.70 per share.

The New Talk Fusion Launches with Fresh Designs, Offerings

Moving at the speed of technology, Talk Fusion has overhauled its web-based business with fresh designs, product offerings and incentives. This week the video communications company unveiled its new look—and its new “Better with Video” slogan—during a Talk Fusion Dream Builder Broadcast by the company’s Founder and CEO, Bob Reina, and Vice President of Training and Development, Allison Roberts.

“At Talk Fusion, we’re constantly innovating, we’re constantly pushing the envelope to keep our video communication products exciting and ahead of the technology curve,” Reina told DSN. “This gives our Associates a huge competitive advantage with hot technology that’s the talk of the Internet.”

Talk Fusion’s newest offering is CONNECT Video Chat, an industry-first product that utilizes WebRTC to enable real-time video communication between any web browsers. Customers can try a free product demo via one of Talk Fusion’s newly redesigned websites, which introduce the company through videos in multiple languages.

The redesign extended to Talk Fusion’s full CONNECT suite of products, which features Video Email, Video Newsletter and Live Meetings as well as the chat tool. With its video communications technology, Talk Fusion has surpassed industry giants such as Yahoo, AOL, Viacom, CBS and MegaVideo to become the eighth-largest online video content provider in the world. Now in 140 countries, the company is setting its sights higher with a fresh look and innovative product offerings.

“Ultimately, our relaunch goal is to maximize the Talk Fusion brand worldwide, which has the additional benefit of helping our Associates achieve greater financial freedom,” said Reina.

As they build their businesses, Talk Fusion Associates will have the opportunity to earn new rewards for their work. The company has also revamped its compensation plan with incentives like Rolex watches, gold and diamond rings for milestone achievements, and a purchased Mercedes-Benz.

Mannatech Launches in Spain with Mission 5 Million

Dallas-based Mannatech is advancing its Mission 5 Million movement with the launch of its operations in Spain. The wellness and skincare company, which celebrated its 20th anniversary this year, has now expanded into 24 markets worldwide.

“Adding Spain to our European market was an essential and natural fit for Mannatech,” said Dr. Robert Sinnott, CEO and Chief Science Officer, in the company’s release. “We have seen a demand for our products and business there that is unprecedented, and we believe that this initial launch will precede an era of long-term growth for this region.”

Mannatech reports that it has targeted additional European markets for expansion following its launch in Spain. Europe, the Middle East and Africa (EMEA)—currently Mannatech’s lowest sales region—generated 8 percent of net sales in 2013. For the quarter ended Sept. 30, 2014, EMEA net sales increased to $4.9 million, up 32.4 percent over third quarter 2013. Mannatech contributes its growth in the region to a rising number of active associates and members.

ASEA: Building a Legacy

by Jennifer Workman Pitcock

Photo above: ASEA headquarters in Salt Lake City.

ASEA


Company Profile

  • Founded: 2009
  • Headquarters: Salt Lake City
  • Top Executives: Verdis Norton, Founder and Chairman of the Board; James Pack, Founder and Vice Chairman of the Board; and Tyler Norton, Founder and CEO.
  • Products: Redox Signaling Molecules suspended in a pristine saline solution

Verdis NortonVerdis Norton

When Verdis Norton retired at 57, he had held high-level executive positions at multiple iconic food companies, most recently as Vice President of Strategy at Kraft Foods. He had created enough wealth and success that he would never need to work again. But as much as Norton loved to golf, he wasn’t content to spend all his time relaxing. Soon after his retirement, he went to work for a biotech company. When he retired from that job four years later, he still wasn’t ready to become a full-time retiree.

So when his son Tyler introduced him to another biotech company, he agreed to sit on the board. He was particularly fascinated by a technology the company owned. Using salt water, the technology created redox signaling reactive molecules identical to those found in the human body. These molecules are necessary for life; they allow cells to communicate with each other. They help with immune system function and cellular repair-and-replace mechanisms.

What makes this technology so unique is that there is no other method to create these molecules outside the body. And as a person’s body ages, they create fewer and fewer of these molecules. Norton recognized that if the redox signaling molecules could be used by the human body, they had great potential health benefits. Though he was skeptical at first, Norton studied the company’s research on the technology and found that the science was good. He was intrigued.


Using salt water, ASEA’s technology creates redox signaling reactive molecules identical to those found in the human body. These molecules are necessary for life and become fewer as a person ages.


The ASEA Story

When Norton attended the first board meeting, he discovered that the biotech company was out of money. In fact, they were about $1 million in debt. He made an effort to raise money for the company, but it eventually folded. Still, he wasn’t ready to give up.

Tyler NortonTyler Norton
James PackJames Pack

Norton had made friends with a man who had moved to Park City, Utah, from New Hampshire, Jim Pack. Pack had retired at 43 from a very successful career in the communications industry. The two men enjoyed golfing together.

Pack says that he soon realized that Norton was something special. “I made the decision on the golf course as we golfed week after week that I was going to do something with this guy,” says Pack. One day they were golfing on the Park City municipal golf course. Norton started to tell him about a terrific product he’d been using. But the company was mismanaged. He told Pack he was going to put together an investment company to acquire this product.

“Jim pulled the golf cart over on the fairway,” Norton recalls, “and he reached in his back pocket and pulled out a folded check that was blank, and he said, ‘You got a pen?’ I handed him a pen, and he wrote a very big check and said, ‘Let’s go do this together.’ ”

Once they acquired the technology after further research to better understand why the product worked, the two men focused on stabilizing the redox signaling molecules. They knew that in order to sell the product they needed to extend its shelf life exponentially. They hired a team of scientists, including Dr. Gary Samuelson, and charged them with the task.

After months of work, the team succeeded. This was a huge breakthrough.

Finding the Right Channel

Kurt RichardsKurt Richards
Chuck FunkeChuck Funke

Once the product was stabilized, the possibility of selling it became a reality. Early on, the founders had the opportunity to sell the product to a global pharmaceutical company. But they ultimately decided not to. “ASEA is a foundational product,” says Executive Vice President Kurt Richards. “The fear was that if we sold the technology, rights, patents and all the research to a pharmaceutical company, it would either take years to bring to market, or they would never bring it to market at all.” The founders also worried that even if the pharmaceutical company did bring the redox signaling molecules to market, the product might be a specific treatment for one ailment. Then the general population would never reap the benefit.


“Because of the complexity of our product, there was the realization that
the product had to be sold with the story.”
—Chuck Funke, Executive Vice President


Ultimately, that’s what made the decision for Norton. He didn’t need to make more money or have more success. But he did want to make his mark. “I feel like this is my opportunity to make a difference that will last beyond my lifetime,” he told Richards.

Norton and Pack examined all possible distribution channels. “Because of the complexity of our product, there was the realization that the product had to be sold with the story,” says Chuck Funke, Executive Vice President. “And that’s how we got into network marketing.”

The Saltwater Challenge

Though the founders knew they had a great product, the science behind it was complex. How would ASEA convince customers that what they were selling wasn’t your garden-variety salt water—especially when those two items were the only ingredients on the label? Both because they wanted to bolster credibility and better understand how the product works, ASEA’s executive team has put a great deal of effort and capital into researching the product. A study conducted by the David H. Murdock Research Institute in 2012 confirms the presence of redox molecules in ASEA.


Today the company has nearly 30,000 active associates and is growing rapidly.


ASEA also increases the body’s production of natural antioxidants, glutathione and SOD by over 500 percent. This was discovered in an in vitro study performed by Pacific Northwest Institute in early 2009.

Perhaps one of the most promising studies was conducted by researchers at Appalachian State University and presented at the 2012 Experimental Biology Conference. The study results surprised even the researchers. After study subjects drank ASEA daily for a week, researchers discovered that ASEA had caused a significant metabolic shift in 43 metabolites, including fatty acids. This suggests that ASEA makes a person’s own fatty acids available to them, allowing users to burn more fat—especially the type that clusters in the belly and hips.

To date, ASEA has spent over $5 million on safety studies alone. All have shown the product to be completely safe for consumption.

Liftoff

ASEAThough explaining the product remains one of ASEA’s biggest challenges, it hasn’t held the company back. Six months after prelaunch, the company was already profitable. ASEA is completely debt-free. That’s due in part to the company’s strong customer base. “The product is so strong and the preferred customer program works so well that we have a very large base,” says Richards. “That means a stronger financial foundation.”

In fact, just three years after its official launch in 2009, ASEA expanded into Europe. It has been in Canada since 2010 and will open in Mexico later this year. Though this may seem quick, ASEA’s expansion has been done very cautiously. “Before we went into Europe, we spent eight to 12 months getting the product approved in Europe, getting all the proper registrations, setting up the proper companies, so that once we opened the market we wouldn’t have to worry about whether ASEA would have issues with regulators,” says Richards. “We waited until we had enough cash in the bank and enough dedication to make sure we did it properly.”

Today the company has nearly 30,000 active associates and is growing rapidly. A new initiative called the Triple A Plan is having a big impact. Following this plan, new Associates can build a lucrative business in 90 to 120 days.

Product in Demand

In order to support the company’s steady growth, ASEA opened a new $1.5 million production facility in August 2013. Its 33,000 square feet house offices, testing labs and a production floor. Storage and fulfillment take place in the warehouse portion of the building. The new facility will produce about 15,000 cases of product each week. That is only about 30 percent of the facility’s capacity, allowing plenty of room to grow as demand increases.

“Getting the facility online and doing that very quickly was an incredible moment for us,” says Vice President of Marketing Noah Westerlund. “We’ve been able to scale up our production and meet the market demand.”


“One thing we’ve always tried to stress is that your ego drive and your economic drive have to be underneath your principle drive.”
—Kurt Richards, Executive Vice President


Focus on Personal Development

Part of ASEA’s ethos is helping the company’s associates realize their potential. “Everything we do at ASEA is guided by a singular commitment to the personal development and education of our associates,” reads ASEA’s website. “One thing we’ve always tried to stress is that your ego drive and your economic drive have to be underneath your principle drive,” says Richards. With this in mind, Verdis and Tyler Norton share principles of their proprietary strategic and operational planning system, StrategicLink, in the training they give their associates. “At lower levels, we teach principles in general terms. As they increase in rank, we bring more of the steps in,” says Richards.

This training takes place in many ways, including the usual conference calls and webinars. But ASEA also does more intensive trainings for those who show promise at various ranks.

If associates hit certain ranks in a specified period of time, they’re invited to special events where this training takes place—boot camps, leadership summits and diamond retreats. They are shown what an average healthy business looks like at their rank. “It helps us to develop a road map for them. There are certain key metrics that we’ve identified, and then we train on those key metrics, leveraging our internal resources and our experienced field leaders. To give an example, one key metric is personal enrollment. Healthy associates at any rank have twice the personal enrollment of those who are not,” Westerlund says.

Finding a Voice Using Social

ASEAASEA is committed to strengthening its social media. Recently, ASEA has stepped up its use of social media to connect with associates. “For us it’s not just a messaging channel,” Westerlund says. “It’s a conversation channel. As important as it is for us to post information, we want to follow others and get their reaction to us. We want to engage in those conversations and really give them a sense of who we are and make them feel included.”

One step that ASEA took was hiring Tyler Gray to manage the company’s social media platforms and grow ASEA’s online presence. Though he has only been at ASEA a short time, he’s already seeing progress. Within two months of his arrival, the company’s Facebook likes were up 12 percent.


“For us [social media’s] not just a messaging channel. It’s a conversation channel. We want to engage in those conversations and really give [associates] a sense of who we are and make them feel included.”
—Noah Westerlund, Vice President of Marketing


“Our TAT, or ‘talking about this,’ score is a solid 2.5 percent. The TAT is a good metric to see how current and engaged you are with your audience. If you have a lot of likes and no one is talking about you, it doesn’t say much,” says Gray, Marketing Communications Specialist. “But if you are a small company that has a high percentage, it means that your posts and communications are having a good effect.”

Since coming on board, Gray has tried to make social media more active, answering questions and engaging with people on social media frequently. Right now he’s working on finding the right “voice” for the company. “A big goal of mine is to communicate our culture—who we are,” he says. “But since I’m new, we’re still trying to find that voice. And as a growing company, it’s going to evolve.”

Creating a Legacy

As ASEA grows, its executives are beginning to consider how they can tweak their message. “Right now our messaging is so much about explaining the science. As we look forward, we’re beginning to focus more on the opportunity,” says Richards.


“We seek longevity. A lot of the decisions we make today reflect the fact that we’re thinking decades down the line.”
—Kurt Richards


Funke agrees. “One of the primary initiatives we have for 2014 and beyond is to raise our opportunity message to match our product message,” he says.

One thing will not change: ASEA is committed to being a legacy company. “We seek longevity,” says Richards. “A lot of the decisions we make today reflect the fact that we’re thinking decades down the line.”

“That means we’re actually as concerned about controlling growth as creating it,” Funke says. “We’re all about consistency.”

Richards adds, “We want to provide distributors the opportunity to create a business that they can and will pass on to their family members. We plan on surviving well into the future to provide ASEA’s benefits to future generations.”