These 15 interesting (and yes, frightening) facts about Usana Health Sciences (NASDAQ:USNA) were posted on Yahoo message board. I thought they nicely summed up this multi-level marketing company, and wanted to share them here. Of course, I’m providing links to evidence which corroborates these facts about Usana.
If someone wants to join Usana as an associate or as an investor and they know the following, then more power to them:
1. The founder renounced his US citizenship and controls a majority of this company in a tax haven
2. The founder’s son runs the company and has held no significant position in any other industry or company
3. Several members of management provided false information in their biographies
4. Twice, an attempt has been made to push up the share price through an offer to buy out the company and twice, the offer has been rescinded
5. In all of the years of its operation, the majority of cash flow and earnings have gone to management and do not remain in retained earnings for the shareholders
6. Associates who sign up are paid almost zero on average so the longevity of the company depends on the ability to continue to recruit people in light of this fact.
7. Several members of advisory boards have conflicts of interest or sketchy professional background information
8. The fastest growing region has had some doubt cast upon it as to where the associates are coming from but whether or not the allegations have any substance, the EVP of that area has resigned to go to work for Shaklee, a competitor
9 Not only is the Pres. of the company not experienced in any company other than Usana, the CFO just resigned and the new CFO does not have a deep background befitting a billion dollar company that Usana was one year ago
10. New product introduction has been spotty at best and the My Healthpak has not been shown to be successful
11. SG&A expenses are increasing at double digit percentage rates and revenues have been declining
12. No new customers have been added on a net basis for well over a year, there are no customers at all in some countries, and the customer loss appears to be accelerating in the weak US economy
13. The payout percentage to associates is rising, only the top 3% of associates are getting the bulk of this money, and so far the increased pay has not attracted net new associates in the US
14. In spite of the spotty performance of the company and the weak depth of management, the annual cash salaries, bonuses, options and stock appreciation rights have increased dramatically.
15. The company has repeatedly refused to release customer turnover rates or associate turnover rates claiming the net number is more helpful.