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Usana Health Sciences did not have noncompete agreements with four executives who the company announced Tuesday were departing for an unspecified business opportunity, the exit sending the company's shares down by the largest percentage among decliners on the New York Stock Exchange.
Dave Wentz, CEO of the Salt Lake City-based marketer of nutritional supplements and body care products, said he did not know what the four would be doing. But, responding to questions about speculation they were moving to a competitor, Wentz said in a conference call with investors and analysts that none were barred by contract from working with competitors of Usana, one of the state's most successful nutritional supplement companies.
"It is my understanding they came across an opportunity they would like to take on," said Wentz. "We don't have specifics. We don't have details."
Those who departed Usana were President and Chief Operating Officer Fred W. Cooper, Chief Financial Officer Jeffrey A. Yates, Executive Vice President of Sales Mark H. Wilson and Riley Timmer, vice president of finance.
Wentz also said the company did not know of any top-line independent distributors who were leaving. The former executives could not be reached for comment.
Company shares finished the trading day down $4.70, or 12.4 percent, to finish at $33.01 on the New York Stock Exchange. At one point early on shares were down as much as 17 percent.
More than 1 million shares changed hands, a 2,000 percent increase over its 65-day average volume, according to The Associated Press.
Usana announced new members of its executive team, and in doing so split Cooper's former duties as president and chief operating officer. Kevin G. Guest was named president of North America, Deborah Woo president of Asia Pacific, G. Douglas Hekking as chief financial officer and Roy W. Truett as chief operating officer.
In a note Tuesday to clients, Jefferies analysts said the new executives have extensive experience with the company that could mitigate any issues arising from the transition.
"The more disconcerting thing for investors, in our opinion, could be the proximity of the departures to its recent acquisition in China and what disruption this could have on that integration process," the analysts wrote.
But Wentz said there were no major differences over the company's strategy for moving into China that caused the departures. Last year, Usana bought a company already operating in China in order to use it as a platform for moving into a country with the world's largest population that is seen as a huge potential market by many companies.
Wentz said Woo had years of experience in the area and would continue to carry out the company's strategy.
"She has been intimately involved with the Chinese market, with this integration," he said.
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