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attempt has been made to push up the share price through an offer to buy out the company and twice, the offer has been rescinded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.
“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.”
I don’t know very much about finances/stocks etc. but from what I THINK I understand about this sentence it does not sound like a bad thing.
Do you mind explaining?
Yes, I can respond… When a bidder is interested in acquiring a target company (eg Usana), a confidentiality agreement / NDA is signed and the bidder conducts due diligence. This includes opening up confidential books, accounts and a host of steps to bet the business. If anything looks awry or potentially won’t benefit the consolidation or price, then the bidder can back out or lower proposed price. The latter is more common unless there are very concerning findings that impair the transaction. The bidder loses Ernest money and pays a breakup fee that is generally a fraction of the offer. Not a good sign of the bidder walks away altogether.
It means that the “offer” is just a ruse to fraudulently inflate the company’s share price. (Sometimes done so company executives and directors can sell their own shares at that inflated price.)
FALSE ACCUSATIONS!!!
Sadly, these were not accusations, but they were cold hard facts.
Tracy do you consider yourself successful?, you should try Usana first, before you talk about it.
Mari – I don’t “consider” myself successful. I am successful. In a real business that doesn’t require me to lie to people to get ahead. I don’t need to try Usana to know about it or talk about it. (Kind of like I don’t have to get cancer to know that cancer is bad.)
No wonder why USANA is still in the business up to now and received much awards.. :'(
Hi Tracy, this article is written in 2008. I wonder what is your view towards USANA company governance in recent, say 3 years? The product is definitely of highest quality compared to others available in similar market.
I haven’t kept up with Usana, but all MLMs are bad. The products are no better than what you can get from non-MLM companies. MLM products are overpriced. And MLM companies are abusive to the participants, 99% of whom will lose money from the scam that is disguised as a business opportunity.
I have been a Usana Associate since then. I am so proud of what the product gives to my family – health is wealth (consumer’s behalf) and health and wealth (Associate’s behalf). I do not regret of entering/investing my money because for just 3-6 months of doing the business, I see my initial investment goes tripled or higher and most of all, I give my family a better health by taking the product which the other nutritional companies can’t provide. This is all a false accusations.
You cannot learn the business unless you experience it.
Usana (any MLM, for that matter) is not a business. It’s a scam.