A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office.
* Other supplementary schedules required by section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrators and Plan Participants of
USANA Health Sciences 401(k) Plan
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the USANA Health Sciences 401(k) Plan (the Plan) as of December 31, 2021 and 2020, and the related statement of changes in net assets available for benefits for the year ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The supplemental information contained in the schedule of assets (held at end of year) has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ Tanner LLC
We have served as the Company’s auditor since 2004
Lehi, Utah
June 23, 2022
The accompanying notes are an integral part of these statements.
The accompanying notes are an integral part of this statement.
NOTES TO FINANCIAL STATEMENTS
NOTE A – DESCRIPTION OF THE PLAN
The following description of the USANA Health Sciences 401(k) Plan (the “Plan”) provides only general information. Participants and other financial statement users should refer to the Plan document, as amended, and summary plan description for a more complete description of the Plan’s provisions.
The Plan is a defined contribution plan covering substantially all United States non-union employees of USANA Health Sciences, Inc. (collectively, the “Company” or the “Employer”) who have completed one month of service and are age 18 or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, and permits traditional 401(k) deferrals (pre-tax) as well as Roth 401(k) deferrals (after-tax).
The trustee for the 2021 and 2020 Plan year is Fidelity Management Trust Company (“Fidelity” or “Trustee”) and the recordkeeping functions were performed by Fidelity Workplace Services, LLC.
Each year participants may elect to contribute up to 75 percent of their annual compensation subject to certain limits as defined in the Plan. Participant contributions are limited by the Internal Revenue Code, which established a maximum contribution of $19,500 ($26,000 for participants aged 50 or older) for the year ended December 31, 2021. Participants may elect to make pre-tax contributions and/or after-tax elective contributions into their accounts. Participants may also contribute rollover amounts representing distributions from certain other defined benefit or defined contribution plans. Under the safe harbor and certain other provisions of the Plan, eligible employees who have not made an affirmative election to defer or not defer will have deferrals withheld in the amount of six percent of their compensation, to be invested in the appropriate target date retirement fund. Participants may direct their investments into one or more of the investment options offered by the Plan, with no more than 25 percent of their investment allocations directed into shares of the USANA Health Sciences, Inc. Stock Fund (“Stock Fund”).
The Company provides a matching contribution equal to 100 percent of the first one percent of a participant’s compensation that is contributed as an elective deferral by the participant, and 50 percent of elective deferrals between one and six percent of the participant’s compensation. The Company’s board of directors may also authorize additional contributions to the Plan. No additional contributions were authorized during the year ended December 31, 2021.
Self-directed individual investment accounts are maintained for each Plan participant. Each participant’s account is adjusted for the participant’s contributions and allocations of (a) the Company’s contributions, (b) investment gains or losses, (c) interest and dividends, and (d) administrative expenses. The allocation of the Company’s discretionary contributions and forfeitures is based on each participant’s contribution, as defined by the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Participants are fully vested in their voluntary contributions, including any net investment income on those contributions. The Company’s matching contributions fully vest at the end of two years of service. Non-elective employer contributions vest 25% per year and are fully vested after four years of service.
USANA HEALTH SCIENCES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE A – DESCRIPTION OF THE PLAN – CONTINUED
|
5.
|
Notes receivable from participants
|
A participant may borrow a minimum of $1,000 up to a maximum of three loans that in the aggregate are equal to the lesser of $50,000 or 50 percent of his or her vested account balance. Loans are secured by the balances in the participants’ accounts and bear interest at rates ranging from 4.25 percent to 6.50 percent, which rates were commensurate with prevailing rates at the time of loan origination. Principal and interest are paid ratably through payroll deductions. Loans are re-paid over a five-year period, unless the loans were used to purchase a principal residence, in which case the payback period may not exceed 30 years. As of December 31, 2021, the Plan had outstanding loans to participants with maturities ranging from 2022 through 2051.
|
6.
|
Benefits paid to participants
|
On termination of service due to death, permanent disability, or retirement, a participant or beneficiary may receive a lump-sum amount equal to the value of the participant’s vested interest in his or her account. For termination of service due to other reasons, the Plan will automatically make a lump-sum distribution of the value of the participant’s vested interest in his or her account where the account balance is less than $5,000. Hardship withdrawals are allowed for participants incurring a “specific and heavy financial need,” as defined by the Plan. Hardship withdrawals are strictly regulated under the Internal Revenue Code and the regulations thereunder, and a participant must exhaust all available loan options and available distributions prior to requesting a hardship withdrawal.
Forfeited accounts related to the Company’s matching contributions may be used to pay any administrative expenses or used to reduce any future Employer matching contributions. The table below provides a reconciliation of the balance of forfeited accounts from December 31, 2020 to December 31, 2021.
|
Balance as of December 31, 2020
|
|
$
|
10,143
|
|
|
Forfeitures
|
|
|
76,063
|
|
|
Application of forfeitures
|
|
|
(21,156
|
)
|
|
Earnings on forfeited account balance
|
|
|
401
|
|
|
Balance as of December 31, 2021
|
|
$
|
65,451
|
|
The Company, as the Plan Sponsor, paid all administrative expenses during the year ended December 31, 2021, except for $215,631.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are presented using the accrual method of accounting in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
The preparation of financial statements in conformity with U.S. GAAP requires Plan management to make estimates and assumptions that affect certain reported amounts of net assets available for benefits at the date of the financial statements, the changes in net assets available for benefits during the reporting period and, when applicable, the disclosure of contingent assets and liabilities at the date of the financial statements. Key estimates include determination of the fair value of investments. Actual results may differ from estimates and assumptions made.
USANA HEALTH SCIENCES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
|
3.
|
Investment valuation and income recognition
|
The Plan’s investments are stated at fair value. Quoted market prices are used to value investments in shares of mutual funds and the Stock Fund. Units of the collective investment fund are valued at net asset value, which approximates fair value, using daily market information. Net appreciation (depreciation) caused by fluctuations in the value of investments is reflected in the statement of changes in net assets available for benefits. Amounts invested may earn interest and dividends, which in turn are reinvested.
Purchases and sales of securities are recorded on a trade-date basis. Income from interest is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Earnings and losses within each fund are allocated to participants based on their proportionate shares in the fund.
In general, the Plan’s securities are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the accompanying statements of net assets available for benefits.
|
4.
|
Notes receivable from participants
|
Notes receivable from participants represent participant loans and are valued at their unpaid principal balance plus any accrued but unpaid interest, which approximates fair value. As of December 31, 2021 and December 31, 2020, no allowances for credit losses had been recorded. If a participant ceases to make loan repayments and the Plan Administrators deem the note receivable from a participant to be a distribution, the note receivable balance is reduced and a benefit payment is recorded.
|
5.
|
Benefits paid to participants
|
Benefits are recorded when paid. As of December 31, 2021, there were no distributions that had been requested but not paid.
NOTE C – FAIR VALUE MEASUREMENTS
The Plan reports investments in accordance with established authoritative guidance, which requires a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.
The three levels are defined as follows:
| |
●
|
Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
|
| |
●
|
Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
|
| |
●
|
Level 3 inputs are unobservable and are used to measure fair value in situations where there is little, if any, market activity for the asset or liability at the measurement date.
|
Mutual funds are valued at the total market value of the underlying assets based upon the publicly quoted price of each fund multiplied by the respective number of units held as of the measurement date and are classified as Level 1 investments.
The Stock Fund is a unitized stock fund consisting primarily of the Company’s common stock, and cash for daily liquidity purposes. The Stock Fund is classified as Level 1, as the total fair value is equal to the quoted market value of total common stock plus the carrying amount of cash, which approximates fair value. The cash balance included within the Stock Fund was $757 and $621 as of December 31, 2021 and December 31, 2020, respectively.
In accordance with Subtopic 820-10, the collective investment fund is measured using the net asset value per unit as a practical expedient and is therefore not classified in the fair value hierarchy.
Redemption frequency for the collective investment fund is immediate, contains no unfunded commitments, and has no redemption restrictions.
USANA HEALTH SCIENCES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE D – EXEMPT PARTY-IN-INTEREST TRANSACTIONS
Plan assets include common stock of the Company. Transactions with respect to shares of the Company’s common stock qualify as party-in-interest transactions. As of December 31, 2021 and December 31, 2020, the Plan held 72,506 shares of the Company’s common stock in the Stock Fund with a value of $101.20 per share, and 78,364 shares of the Company’s common stock in the Stock Fund with a value of $77.10 per share, respectively.
Notes receivable from participants as of December 31, 2021 and December 31, 2020, were $1,711,418 and $1,823,139, respectively. Notes receivable are considered party-in-interest transactions. Interest income pertaining to notes receivable from participants totaled $88,220 for 2021.
Certain Plan investments are shares in registered investment company funds managed by Fidelity Investments, an affiliate of the Trustee as defined by the Plan, and therefore, these transactions qualify as party-in-interest transactions.
NOTE E – PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue the Company’s contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants become 100 percent vested in their accounts.
NOTE F – TAX STATUS
The Plan has adopted a non-standardized prototype plan for which the Internal Revenue Service (“IRS”) has issued a favorable opinion letter covering the qualification of the Plan. The Plan Administrators and the Plan’s tax counsel do not anticipate that changes in the Plan after the date of the IRS opinion letter will affect the qualified and tax-exempt status of the Plan. Accordingly, the financial statements of the Plan do not include provisions, assets or liabilities related to income taxes.
U.S. GAAP requires management to evaluate income tax positions taken by the Plan and to recognize an income tax liability if the Plan has taken an uncertain tax position that more likely than not would not be sustained upon examination by taxing authorities. The Plan Administrators analyzed the tax positions taken by the Plan and have concluded that as of December 31, 2021 and December 31, 2020, there are no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by tax jurisdictions for tax years for which the applicable statutes of limitations have not expired; however, there are currently no audits for any tax periods in progress.
USANA HEALTH SCIENCES 401(k) PLAN
SUPPLEMENTAL INFORMATION
Employer Identification Number: 87-0500306
Plan Number: 001