USANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited

June 30 December 31 1996 1995 -------------- -------------- ASSETS Current assets Cash $ 1,881,370 $ 2,976,406 Accounts receivable, less allowance for doubtful accounts of $ 0 in 1996 and $ 2,000 in 1995 126,478 11,246 Inventories 4,011,650 2,127,724 Prepaid expenses and other assets 364,912 75,365 Deferred income taxes 170,059 170,000 -------------- -------------- Total current assets 6,554,469 5,360,741 Property and equipment, at cost Land 1,748,877 1,748,877 Building under construction 4,297,487 1,508,886 Equipment and furniture, net of accumulated depreciation and amortization of $1,150,463 in 1996 and $ 874,178 in 1995 1,721,059 1,318,343 Other assets Deposits on Machinery 455,967 186,115 Other 49,952 50,641 -------------- -------------- Total assets $ 14,827,811 $ 10,173,603 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,719,773 $ 1,210,205 Short-term borrowings 1,000,000 - Accrued liabilities: Accrued commissions 552,331 231,819 Sales tax payable 565,447 465,830 Income taxes payable 549,433 1,435,469 Accrued compensation and related items 404,460 99,074 Other 366,503 36,744 Unearned revenue 327,486 76,127 Current maturities of long-term obligations 10,909 10,909 -------------- -------------- Total current liabilities 5,496,342 3,566,177 Long-term obligations, less current maturities 1,294 3,910 Deferred income taxes 49,160 49,000 Stockholders' equity Common stock, no par value, 50,000,000 shares authorized, 6,326,619 and 6,280,119 shares issued and outstanding at 1996 and 1995, respectively. 6,146,742 6,004,917 Cumulative foreign currency translation adjustment (7,244) (3,752) Retained earnings 3,141,517 553,351 --------------- -------------- Total stockholders' equity 9,281,015 6,554,516 --------------- -------------- Total liabilities and stockholders' equity $ 14,827,811 $ 10,173,603 =============== ==============

The accompanying notes are an integral part of these statements USANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited

Six Months Ended June 30, ----------------- 1996 1995 --------------------------------- Increase (decrease) in cash and cash equivalents Cash Net earnings $ 2,588,165 $ 906,240 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 285,032 159,304 Gain on sale of property and equipment (5,784) (104,281) Deferred income taxes 101 23,000 Changes in assets and liabilities Receivables (115,232) (9,723) Inventories (1,883,926) (462,329) Prepaid expenses and other assets (288,858) (137,111) Cash overdraft - (275,084) Accounts payable 509,568 56,071 Accrued liabilities 420,597 612,549 --------------- -------------- Total adjustments (1,078,502) (137,604) --------------- -------------- Net cash provided by operating activities 1,509,663 768,636 --------------- -------------- Cash flows from investing activities Equipment deposits (269,852) (61,790) Construction in progress of office building (2,788,601) Purchase of property and equipment (691,362) (259,822) Proceeds from sale of equipment 9,400 230,700 Advances - related parties 160,000 --------------- -------------- Net cash (used in) provided by investing activities (3,740,415) 69,088 --------------- -------------- Cash flows from financing activities Payments on long-term debt (2,616) (17,182) Short-term borrowings 1,000,000 Common stock issued 141,825 --------------- -------------- Net cash provided by (used in) financing activities 1,139,209 (17,182) --------------- -------------- Effect of exchange rate changes on cash (3,493) - --------------- -------------- Net (decrease) increase in cash and cash equivalents (1,095,036) 820,542 Cash and cash equivalents at beginning of period 2,976,406 646,904 Cash and cash equivalents at end of period $ 1,881,370 $ 1,467,446 =============== ==============

The accompanying notes are an integral part of these statements USANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Unaudited

Three Months Ended June 30, --------------------------------- 1996 1995 ------ ------- Net sales $ 14,214,782 $ 5,587,461 Cost of sales 3,069,426 1,343,219 --------------- -------------- Gross profit 11,145,356 4,244,242 Expenses Distributor incentives 6,337,838 2,257,628 Selling, general and administrative 2,304,371 1,003,805 Research and development 155,706 62,260 --------------- -------------- Total operating expenses 8,797,915 3,323,693 --------------- -------------- Earnings from operations 2,347,441 920,549 Other Income (expense) Interest income 39,313 14,296 Interest expense (472) Other, net 199 104,281 --------------- -------------- Total other income (expense) 39,040 118,577 --------------- -------------- Earnings before income taxes 2,386,481 1,039,126 Income taxes (917,274) (415,651) --------------- -------------- NET EARNINGS $ 1,469,207 $ 623,475 =============== ============== Earnings per common and common equivalent share $ 0.23 $ 0.12 =============== ============== Weighted average number of common and common equivalent shares 6,285,850 5,315,742 =============== ==============

The accompanying notes are an integral part of these statements USANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Unaudited

Six Months Ended June 30, --------------------------------- 1996 1995 ------ ------ Net sales $ 24,768,942 $ 8,787,416 Cost of sales 5,107,184 2,158,400 -------------- -------------- Gross profit 19,661,758 6,629,016 Expenses Distributor incentives 11,154,273 3,611,992 Selling, general and administrative 4,141,297 1,593,992 Research and development 283,491 80,248 -------------- ------------- Total operating expenses 15,579,061 5,286,232 -------------- ------------- Earnings from operations 4,082,697 1,342,784 Other Income (expense) Interest income 89,147 21,825 Interest expense (856) Other, net 13,331 104,281 -------------- ------------- Total other income (expense) 101,622 126,106 -------------- ------------- Earnings before income taxes 4,184,319 1,468,890 Income taxes (1,596,154) (562,650) -------------- ------------- NET EARNINGS $ 2,588,165 $ 906,240 ============== ============= Earnings per common and common equivalent share $ 0.41 $ 0.17 ============== ============= Weighted average number of common and common equivalent shares 6,282,984 5,315,742 ============== ============= The accompanying notes are an integral part of these statements.